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Air Canada pilots dispute goes to arbitration after negotiations fail
May 20th, 2012TORONTO – A final last-ditch attempt between Air Canada and its pilots to work out a new contract on their own came to a crashing halt Saturday as talks fell through and arbitration appeared the last resort.
The union representing Air Canada (TSX:AC.B) pilots issued a news release Saturday indicating that 10 days of negotiations failed to produce a deal and the dispute was to go to arbitration.
“To say we are disappointed would be a vast understatement,” Captain Jean-Marc Belanger, Chair of the Master Executive Council of the Air Canada Pilots Association, said in the news release.
“We did everything possible to reach an agreement, paring down our proposals, addressing the airline’s issues and showing flexibility at the bargaining table.”
The union wouldn’t elaborate on what issues are keeping the two sides apart, citing a blackout that was imposed on the talks.
Air Canada also expressed disappointment, but had no further comment. Federal Labour Minister Lisa Raitt’s office did not immediately respond to an email.
The two sides were to meet with federal arbitrator Doug Stanley, likely within days, who would lay out the rules for the arbitration process. The two sides would both submit proposals to Stanley who is to pick one of them as the basis of a new contract.
The threat of a lockout of the pilots prompted the federal government to intervene in the dispute earlier this year with back-to-work legislation. The legislation allowed an arbitrator to impose a settlement.
A similar set up was imposed on the union that represents its 8,600 mechanics, baggage handlers and cargo agents. The ground crews were poised to go on strike at the same time the airline was threatening to lockout the pilots. Air Canada also agreed to hold 10 days of negotiations to try to avoid arbitration, but the status of those talks was not immediately known.
Air Canada has been besieged with troubles from virtually all its major unions. The federal government had to also intervene last year in disputes with the airline’s customer service staff and its flight attendants.
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Malaya Business Insight
May 20th, 2012
Global Steel scores win in arbitration case
A Singapore arbitration court has ruled in favor of the Indian owners of the former National Steel Corp. over Iligan City-based facilities.
The Philippine National Bank (PNB) said the Singapore International Arbitration Center (SIAC) has issued in favor of Indian-controlled Global Steel Philippines (SPV-AMC), Inc. and Global Ispat Holdings (SPV-AMC) the arbitration case regarding the old National Steel Corp. in Iligan City.
The company in a regulatory filing said that SIAC has issued a “partial award” of the case, where PNB holds a significant interest.
“We wish to advise the Exchange that we received from the Singapore International Arbitration Center (SIAC) a partial award regarding the arbitration proceedings between Global Steel Philippines (SPV-AMC), Inc. and Global Ispat Holdings (SPV-AMC), Inc. (claimants), and Danilo L. Concepcion and ors (respondent). Such award was rendered in favor of claimants, including such reliefs as payment by respondents of a certain sum of money that maybe subject to set-off against receivables from claimants,” PNB said.
The bank, one of the respondents in the case, holds a 41 percent interest in the claim.
It said it has set aside the appropriate reserve position for the share,” the bank said.
The case stemmed from an effort by Global Steel to prevent getting declared in default on payments after getting control of the Philippine steel mill in 2004.
Global Steel Philippines the creditors and liquidator to arbitration after the latter allegedly failed to deliver clean titles of the Iligan City facilities due to unpaid real estate taxes owed by the NSC.
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E*Trade Settles Auction Rate Securities Case But The Product Keeps On Giving Grief
May 18th, 2012
A lot of unhappy customers were burned by Auction Rate Securities — and a lot of stockbrokers aren’t too happy with the product either.
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in December 2010, customer Claimant Najdzin asserted damages arising from breach of fiduciary duty, misrepresentation, omission of facts and unsuitability in connection with his purchase of various Blackrock and Eaton Vance auction rate securities (“ARS”). Claimant sought Claimant $125,000.00 in compensatory damages; $500,000 in punitive damages, plus interest attorneys’ fees, and costs. In the Matter of the FINRA Arbitration Between Louis Najdzin, Claimant, vs. E*Trade Securities LLC, E*Trade Financial Corporation, and William John Velthaus, Respondents (FINRA Arbitration 10-05584, May 10, 2012).
Respondents E*Trade Securities LLC and Velthaus generally denied the allegations and asserted various affirmative defenses.
Respondent E*Trade Financial Corporation did not enter an appearance in this matter.
Respondents filed a Motion to Expunge Velthaus’ Central Registration Depository records (“CRD”), which Claimant did not oppose.
Settlement
In February 2012, the parties reached a settlement and, thereafter, an expungement telephonic hearing was held. The FINRA Arbitration Panel recommended the expungement of the arbitration from Respondent Velthaus’s CRD. In reaching that decision, the Panel reviewed the parties’s December 1, 2011, Settlement Agreement and General Release; and also the transcript of a September 10, 2007, telephone conversation between Claimant and Velthaus during which Claimant decided to purchase the ARS in dispute.
Because this Panel presented its expungement rationale with great clarity, I offer their words to you:
Claimant bought the auction rate securities on September 10, 2007. The widespread failure of auction rate securities did not commence until February 2008. At the time of the sale, auction rate securities were not considered unsafe or imprudent. There was no significant history of auction failures. Mr. Velthaus testified there had been no major failures since that involving Drexel Burnham & Lambert some 18 years earlier. Claimant did not claim that Mr. Velthaus had information indicating the threat of likely auction failures that he suppressed.
The underlying securities were AAA rated New Jersey municipals. The transcript of the telephone conversation reveals that Mr. Velthaus also discussed with Claimant investing in FDIC insured certificates of deposit and United States government treasury securities, which he described as the “most safe, most liquid securities in the world” as alternatives to the auction rate securities.
E*Trade Securities was not an underwriter, market maker, auction agent or bidder for auction rate securities and did not have auction rate securities in inventory. Mr. Velthaus testified that he made a smaller commission on the sale of auction rate securities than he would have made on Claimant’s purchase of the certificates of deposits or government securities he discussed with Claimant. Mr. Velthaus advised Claimant that E*Trade Securities “is being compensated by the issuer of the security”.
Claimant is an experienced investor who carried debit balances, traded options and was able to evaluate risks. He stated in the telephone conversation with Mr. Velthaus “I’m pretty risk tolerant… I’m not opposed to risk. I mean, I understand the risks of the market… it’s not like I’m going to say, ‘Hey, you lost me money’”.
Bill Singer’s Comment
Few products caused more harm than ARS — they angered many customers whose savings were tied up in the suddenly illiquid securities; and many stockbrokers were named in lawsuits and arbitrations concerning a product that, frankly, they had believed in and were victimized by. See some of these “Street Sweeper” articles:
Public Customer Seeks $1 Million From Oppenheimer in ARS Arbitration (December 2, 2011)
The Ghost of Bear Stearns Raised in $59 Million FINRA ARS Arbitration Against JP Morgan (November 8, 2011)
US Airways Lands $15 Million FINRA Auction Rate Securities Award (June 2, 2011)
Arbitration Litigates ARS Suitability (December 29, 2010)
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Philippines loses arbitration case vs Indian-run steel firm
May 18th, 2012MANILA, Philippines – The Indian-led groups behind the long-idled steel company in Iligan City won a favorable decision from an arbitration court in Singapore over sums of money it was supposed to pay the city government and other creditors.
In a disclosure to the stock exchange on Friday, May 18, Philippine National Bank (PNB) said they received from the Singapore International Arbitration Center “a partial award…in favor of the Claimants, including such reliefs as payments by Respondents of a certain sum of money that may be subject to set-off against receivables from Claimants.”
“We wish to advise the Exchange that we received from the Singapore International Arbitration Center a partial award regarding the arbitration proceedings between Global Steel Philippines (SPV-AMC), Inc. and Global Ispat Holdings (SPV-AMC), Inc, and Danilo L. Concepcion and Ors,” PNB wrote.
“The Philippine National Bank, one of the Respondents, holds a 41% interest in the claim, and has already set aside the appropriate reserve provision for the same,” it stressed.
At stake is the former National Steel Corp., a manufacturing company in Iligan that was once touted as the largest in southeast Asia before financial, as well as political, challenges haunted it in the 1990′s.
In 2008, Global Steel Philippines Inc. (GSPI), which operates the steel manufacturing complex, took its creditors and liquidator to the arbitration court to stop its lenders from declaring it in payment default.
GSPI claimed that their counterparts failed to deliver clean titles of the facilities owing to unpaid real estate taxes of the then National Steel Corp. between 1999, the time when the plant closed, and September 2004, when GSPI took over the facilities.
GSPI claimed it was not able to secure loans — and keep the steel mills running — for failure to take possession of the titles to the property.
Real estate taxes
Local politics among the government officials in the host city of Iligan played a role in the dispute over the real estate tax payments, which was what set off the arbitration case.
How much real estate tax to pay was the main issue.
Some members of the Iligan local government wanted the Indian owners, if not the creditors and liquidators of the firm, to pay as much as P3 billion, representing all unpaid taxes even before the Indian operators came into the picture.
However, the city government has also previously accepted a P133 million payment from the Indian groups, who eventually asserted they don’t owe more than that.
As a result, court cases between and among the city government, the creditors, the liquidators (led by lawyer Danilo Concepcion), the creditors like PNB, and the Indian operators ensued.
Meantime, the manufacturing plant stayed idle, missing opportunities to revive it again and take advantage of the spikes in demand in both local and export markets.
Indian owners
National Steel Corp. was once the Philippines’ pride. During the Marcos years, it was designed to be a key component in the country’s industrialization and was strategically located in Iligan City in Northern Mindanao so it has access to cheap power (Iligan is host to the hydro-powered Agus plants) and could readily ship out finished products through the northern Mindanao ports.
It was placed under the Office of the Liquidator from 2000 to 2004 after it was saddled by debts, caused largely by mismanagement, as well as the Asian financial crisis in the 90′s.
Several options were considered, and many buyers, including a Malaysian group, had eyed it.
Amid a contest between two of Indian’s well-known (and feuding) brothers, the Arroyo government decided to award it to the group of Pramod Mittal.
Pramod Mittal is the younger brother of Lakshmi Mittal, one of the world’s richest and the owner of ArcelorMittal, the world’s biggest steelmaker.
The award to Pramod’s group was sealed in 2004, around the time former President Gloria Macapagal Arroyo won her 2nd term in office.
The assets (and liabilities) were acquired by Global Steel Holdings, Ltd. [GSHL] of Pramod Mittal’s Ispat Group, which was initially known as as Global Steelworks Infrastucture Inc. [GSII]. It was then registered in the Securities and Exchange Commission (SEC) on October 2005 as Global Steel Philippines [SPV-AMC], Inc.
The Indian group’s funds eventually dried up and persistent promise to bring in a partner with deep pockets did not materialize. - Rappler.com
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Arbitration set for May 30 in Saints case
May 16th, 2012An arbitration hearing into whether National Football League commissioner Roger Goodell has jurisdiction to punish Saints players for the team’s bounties program has been set for May 30.
The players’ union has asked arbitrator Stephen Burbank of the University of Pennsylvania to rule if the players should be punished for the system that the league says ran for three years. The union argues that Burbank, not Goodell, should hear the appeals filed by Jonathan Vilma, suspended for the 2012 season, Will Smith (four games), Anthony Hargrove (eight games) and Scott Fujita (three games).
A separate hearing is being held Wednesday before arbitrator Shyam Das after the NFLPA filed a grievance saying Goodell can’t discipline players for their actions before the collective bargaining agreement was signed in August.
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E*Trade Settles Auction Rate Securities Case But The Product Keeps On Giving Grief
May 16th, 2012
A lot of unhappy customers were burned by Auction Rate Securities — and a lot of stockbrokers aren’t too happy with the product either.
In a Financial Industry Regulatory Authority (“FINRA”) Arbitration Statement of Claim filed in December 2010, customer Claimant Najdzin asserted damages arising from breach of fiduciary duty, misrepresentation, omission of facts and unsuitability in connection with his purchase of various Blackrock and Eaton Vance auction rate securities (“ARS”). Claimant sought Claimant $125,000.00 in compensatory damages; $500,000 in punitive damages, plus interest attorneys’ fees, and costs. In the Matter of the FINRA Arbitration Between Louis Najdzin, Claimant, vs. E*Trade Securities LLC, E*Trade Financial Corporation, and William John Velthaus, Respondents (FINRA Arbitration 10-05584, May 10, 2012).
Respondents E*Trade Securities LLC and Velthaus generally denied the allegations and asserted various affirmative defenses.
Respondent E*Trade Financial Corporation did not enter an appearance in this matter.
Respondents filed a Motion to Expunge Velthaus’ Central Registration Depository records (“CRD”), which Claimant did not oppose.
Settlement
In February 2012, the parties reached a settlement and, thereafter, an expungement telephonic hearing was held. The FINRA Arbitration Panel recommended the expungement of the arbitration from Respondent Velthaus’s CRD. In reaching that decision, the Panel reviewed the parties’s December 1, 2011, Settlement Agreement and General Release; and also the transcript of a September 10, 2007, telephone conversation between Claimant and Velthaus during which Claimant decided to purchase the ARS in dispute.
Because this Panel presented its expungement rationale with great clarity, I offer their words to you:
Claimant bought the auction rate securities on September 10, 2007. The widespread failure of auction rate securities did not commence until February 2008. At the time of the sale, auction rate securities were not considered unsafe or imprudent. There was no significant history of auction failures. Mr. Velthaus testified there had been no major failures since that involving Drexel Burnham & Lambert some 18 years earlier. Claimant did not claim that Mr. Velthaus had information indicating the threat of likely auction failures that he suppressed.
The underlying securities were AAA rated New Jersey municipals. The transcript of the telephone conversation reveals that Mr. Velthaus also discussed with Claimant investing in FDIC insured certificates of deposit and United States government treasury securities, which he described as the “most safe, most liquid securities in the world” as alternatives to the auction rate securities.
E*Trade Securities was not an underwriter, market maker, auction agent or bidder for auction rate securities and did not have auction rate securities in inventory. Mr. Velthaus testified that he made a smaller commission on the sale of auction rate securities than he would have made on Claimant’s purchase of the certificates of deposits or government securities he discussed with Claimant. Mr. Velthaus advised Claimant that E*Trade Securities “is being compensated by the issuer of the security”.
Claimant is an experienced investor who carried debit balances, traded options and was able to evaluate risks. He stated in the telephone conversation with Mr. Velthaus “I’m pretty risk tolerant… I’m not opposed to risk. I mean, I understand the risks of the market… it’s not like I’m going to say, ‘Hey, you lost me money’”.
Bill Singer’s Comment
Few products caused more harm than ARS — they angered many customers whose savings were tied up in the suddenly illiquid securities; and many stockbrokers were named in lawsuits and arbitrations concerning a product that, frankly, they had believed in and were victimized by. See some of these “Street Sweeper” articles:
Public Customer Seeks $1 Million From Oppenheimer in ARS Arbitration (December 2, 2011)
The Ghost of Bear Stearns Raised in $59 Million FINRA ARS Arbitration Against JP Morgan (November 8, 2011)
US Airways Lands $15 Million FINRA Auction Rate Securities Award (June 2, 2011)
Arbitration Litigates ARS Suitability (December 29, 2010)
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Shearman vows to triple City arbitration group as partner quits for US rival
May 14th, 2012
Global Antitrust Enforcement in M&A Transactions
by Ian G. John, Partner, New York; Simon Baxter, Partner, Brussels; Nikolaos M. Peristerakis, Counsel, Brussels; and Kenneth B. Schwartz, Counsel, New York
Originally published in 2012 Insights, Skadden’s fourth annual collection of commentaries on the critical legal issues businesses are facing in 2012, this article examines recent antitrust developments in M&A transactions in the United States, European Union, China, Brazil and India.
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Hong Kong Progresses Arbitration Centre Credentials
May 14th, 2012by Mary Swire, LawAndTax-News.com, Hong Kong
14 May 2012
As part of the government’s determination to develop Hong Kong into a regional
dispute resolution centre, in particular as an international arbitration hub
in the Asia Pacific, the Secretary for Justice, Wong Yan Lung, has announced
a broad consensus in Hong Kong on the setting up of an industry-led single accreditation
body for mediators.
Addressing an audience of overseas and local mediation experts at the “Mediate
First” conference, Wong said the Mediation Task Force was now working hard
on the detailed constitution of this body – the Hong Kong Mediation Accreditation
Association.
“The Association will perform the role of the premier accreditation body
for mediators in Hong Kong, discharging accreditation and disciplinary functions,
Wong confirmed. The current thinking is that the four major mediation
service providers, namely the Law Society of Hong Kong, the Hong Kong Bar Association,
the Hong Kong International Arbitration Centre and the Hong Kong Mediation Centre,
will be (its) founding members.
At present, some 1,600 mediators in Hong Kong are accredited by a number of
different bodies, each adopting its own training and accreditation criteria.
The establishment of the Association adopting a standardized accreditation system
will help enhance public confidence in mediation services.
He also disclosed that another significant target that has almost been reached is
the enactment of a Mediation Ordinance to provide a regulatory framework for
mediation. Among other things, the Mediation Bill seeks to set out a clearer
regime regarding important issues such as confidentiality and admissibility
of mediation communications. It is hoped that the bill will be enacted within
this legislative year.
Wong added that mediation as a dispute resolution method had taken root
in Hong Kong,” adding that one particularly noteworthy venture is the
setting up of the Financial Dispute Resolution Centre (FDRC) by the government
with the support of the financial institutions. The FDRC, which is expected
to be established in mid-2012, aims to provide an independent and affordable
avenue for resolving monetary disputes between individual clients and financial
institutions.
It has been noted that, following the commencement of the new Arbitration Ordinance
on June 1 last year, Hong Kong has had a brand new regulatory framework to enable
arbitration to realize its full potential as a dispute resolution mechanism,
and to further strengthen the city’s credentials as the regional hub for international
arbitration. It has also been apparent that Hong Kong is receiving significant
support in this respect from the Chinese government.
Hong Kongs mediation law is now in line with the latest and best international
practice, is easily accessible to both local and foreign arbitration users and
practitioners, and achieves the fair and speedy resolution of disputes to avoid
unnecessary costs. The Arbitration Ordinance also includes the protection of
confidentiality in arbitration proceedings, as well as court hearings related
to those proceedings.
.
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The Securities Arbitration Law Firm of Klayman & Toskes Launches Investigation on Behalf of Inland American REIT …
May 12th, 2012NEW YORK, May 10, 2012 (GLOBE NEWSWIRE) — The Securities Arbitration Law Firm of Klayman & Toskes (“K&T”), www.nasd-law.com, announced today that it is investigating claims on behalf of investors who purchased Inland American Real Estate Trust, Inc. (“Inland American”) from full-service brokerage firms. It was recently reported that Inland American, the largest nontraded real estate investment trust (“REIT”) in the industry, is under investigation by the U.S. Securities and Exchange Commission (“SEC”), for potential violations of federal securities laws regarding its fees and administration.
According to Inland American’s quarterly report, the company “has learned that the SEC is conducting a nonpublic, formal fact-finding investigation to determine whether there have been violations of certain provisions of the federal securities laws.” Those potential violations relate to “the business manager fees, property management fees, transactions with affiliates, timing and amount of distributions paid to investors, determination of property impairments, and any decision regarding whether the company might become a self-administered REIT.”
Many investors purchased Inland American at the recommendation of their brokers who advised them that it was a low risk, safe investment. In some cases, brokers placed a substantial portion of their client’s assets in the REIT, creating an over-concentration in a single product. Consequently, Inland American investors may be able to recover some of their losses by filing a securities arbitration claim against their full service brokerage firm, for sales practice violations in connection with the sale of this REIT. Under FINRA Rules, brokerage firms have an obligation to make only suitable recommendations, and to fully disclose all risks associated with a recommended product. Moreover, brokerage firms have an obligation to conduct a reasonable investigation of the issuer before approving a securities product for sale to their customers.
Investors who purchased Inland American can contact K&T to explore their legal rights and options. The attorneys at K&T are dedicated to pursuing claims on behalf of investors who have suffered significant losses. K&T, an experienced, qualified and nationally recognized securities litigation law firm, practices exclusively in the field of securities arbitration and litigation. It continues its representation of investors throughout the world in securities arbitration and litigation matters against major Wall Street brokerage firms. K&T is handling numerous claims on behalf of REIT investors including Desert Capital REIT, Behringer Harvard Short-term Opportunity REIT, Behringer Harvard REIT, Inland Western n/k/a Retail Properties of America, Cornerstone Core Properties REIT, CIP Leveraged Advisors, and KBS REIT.
If you are an investor of Inland American or other REITs, please contact Steven D. Toskes, Esquire or Jahan K. Manasseh, Esquire of Klayman & Toskes, P.A., at 888-997-9956 or visit us on the web at www.nasd-law.com
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