Federal Judge Pleads Guilty To Obstruction Of Justice

February 23, 2009

A U.S. District judge in Houston pleaded guilty Monday to a obstruction of justice and resigned from the bench in a deal that ends prosecutor’s efforts on other charges.

Jury selection was set to begin today for Judge Samuel Kent on the obstruction charge and five felony charges that he sexually abused two court employees.

Kent faces up to 20 years in prison on the obstruction charge, which stemmed from an investigation conducted by a Special Investigative Committee of the 5th Circuit Court that was looking into allegations that he had non-consensual sexual contact with a court employee.

Famed defense attorney Dick DeGuerin spoke to reporters just after the hearing saying “Judge Kent believes that this settlement is in the best interest of all involved.”

DeGuerin said that Kent made the decision because a trial would have been long, embarrassing and difficult for all the parties.

Kent’s decision to retire after pleading guilty will have no effect on his eligibility for retirement benefits. Congress is expected to take action quickly to impeach Kent and get him off the government’s payroll. If they do so, Kent will be the 14 judge impeached by the U.S. House for “high crimes and misdemeanors.”

Dallas Company Wins Libel Suit

February 11, 2009

A Web site built to criticize Orix Capital Markets LLC is now under the company’s control, and the family responsible for the content of the site was found to have libeled Orix in one of the largest of such cases in Texas.

A federal jury in Dallas found that Cyrus Rafizadeh and his family’s company that was also named in the suit had defamed and libeled Orix with the www.preditorix.com. The jury awarded the company $2.5 million in compensatory damages and $10 million in punitive damages.

Preditorix.com came online two years ago after Orix foreclosed on an apartment complex in Louisiana  owned by the Rafizadeh family. A Louisiana court ruled that the foreclosure was legal even though the family was current on mortgage payments because they had failed to maintain the property.

Tim Gavin, the attorney who represented the Rafizadehs and their company named in the lawsuit, told the Dallas Morning News “that the concern should be that verdicts such as this may chill free expression on the Internet at a time when financial institutions are causing pain for families.”

The story in the Dallas newspaper suggests that juries might be more open to this type of suit, but I think that the scope of the decision will be limited to Web sites that are set up to attack specific companies, not sites that are designed to allow consumers to vent about their bad experiences with any company.

Bankruptcy Judge Questions Pilgrim’s Severance Agreements

February 9, 2009

A Fort Worth bankruptcy Judge asked officials with Pilgrim’s Pride and the U.S. Trustee assigned to the case to submit briefs in support of their arguments about consulting contracts for the former chief operating officer (COO) and chief executive officer (CEO).

U.S. Bankruptcy Judge Dennis M. Lynn told both parties that he was not happy with the arrangement and asked them to submit briefs by February 12.

U.S. Trustee William T. Neary objected to the agreements saying that they violate legal restriction on severance packages during a bankruptcy proceeding.

The proposed agreements would pay former CEO Clint Rivers $83.500 a month for four months and former COO Robert A. Wright $50,000 a month for three months to secure non-compete clauses for their separation from the company.

William K. Snyder, a consultant hired to restructure the company just prior to its December 2008 Chapter 11 bankruptcy filing, told the judge at a hearing Tuesday, January 3, that it is in the company’s best interest to keep the two out of the marketplace.

“The fact is that we’re in bankruptcy and trying to keep as much business as we can.” Snyder told the judge, according to court records. “They were the face of the company (Pilgrim’s Pride).”

The pair received $143,242 in severance, as part of an agreement that restricts them from spilling trade secrets or talking negatively about the company but does not govern work for a competitor.

Office Complex Goes To Lender In Foreclosure Auction

February 5, 2009

A southwest Fort Worth office complex went to the lender who forced the property into Tuesdays foreclosure auction.

GE Real Estate made a $24.9 million bid to purchase the 450,000 square foot Overton Centre on the steps of the Tarrant County Courthouse.

The owners of the property told the Fort Worth Star Telegram that they found it impossible to refinance the property in the economic downturn.

Bill Cawley, president and chief executive of Cawley Partners in Dallas and head of the investor group that bought the buildings in 2005, described the lending climate as “brutal.”

“They would not deal with us,” Cawley said of GE Real Estate.

The office complex, near Hulen Street and Interstate 20, was posted for foreclosure after the owners were unable to pay off a $25.3 million loan that had been due in June.

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