Daily Archives: March 11, 2005

A couple of downtown developments

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This Chronicle article reports on the imminent closing of the Palace Boot Shop, which is a downtown Houston institution. The nearby Christ Church Cathedral has acquired the downtown city block where the shop is located, and brother-owners Lakis and Steve Xydis have decided to take a break for a year or two before deciding whether to reopen the shop in another location. Any suggestions on where I should buy my boots in the meantime?
Meanwhile, a couple of blocks down the street from the boot shop, this Chronicle article reports that Reece Rondon was sworn in this week as replace Bruce Oakley as judge of the 234th Harris County State District Court. Mr. Oakley stepped down earlier this year to return to private practice.
Judge Rondon was first appointed to the 334th District Court in October 2003, but he lost a close race in the 2004 Republican primary to Sharon McCally by 307 votes. Judge McCally went on to win the seat in the November election. Between stints on the bench, Judge Rondon returned to private practice at Andrews Kurth, where he had practiced before taking the bench. His new term in office will run until 2006, when he intends to run for a full term.

French formally target Continental in Concorde crash probe

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A French magistrate opened a formal investigation on Thursday of Houston-based Continental Airlines for manslaughter in the alleged role that one of its jets played in the July 2000 crash of the supersonic Concorde. The step of placing Continental under investigation is the process that the French criminal justice system follows prior to formally charging a defendant with a crime, such as the anticipated manslaughter and involuntary injury charges in this case.
Investigators have previously concluded that a titanium strip that fell from a Continental DC-10 onto the runway caused one of the Concorde’s tires to burst, which in turn propelled rubber debris that perforated the Concorde’s fuel tanks. Continental contends that it is not responsible for causing the crash because of defects in the Concorde’s fuel tanks.

More courthouse steps settlements in WorldCom class action

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Deutsche Bank AG, German bank WestLB AG and Italian bank Caboto Holding Sim joined most of the other financial institution-defendants in the WorldCom class action yesterday in agreeing to settle fraud allegations for their participation in the sale of WorldCom Inc. bonds in 2000 and 2001. The settlements come on the eve of a scheduled trial of the case next week, and leaves JP Morgan Chase and a couple of smaller financial institutions as the only remaining defendants in the case. This link will take you to the previous posts on the WorldCom class action settlements.
Deutsche Bank’s settlement amount is $325 million, while WestLB agreed to pay $75 million and Caboto $37.5 million. Those amounts increase the WorldCom class action settlement pot to about $3.7 billion, which is for the time being the largest recovery ever in in a securities class-action lawsuit. Nevertheless, sharpies on such matters are already betting that the settlement pot and/or damages awarded against the financial institution-defendants in the Enron class action will lap the WorldCom settlement pot by several billion.

Texas Pacific’s purchase of Enron Oregon utility scuttled

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The Oregon Public Utility Commission announced Thursday that it had decided not to approve Texas Pacific Group‘s proposed $2.35 billion purchase of Enron subsidiary Portland General Electric because “the potential harms or risks to PGE customers from the deal outweigh the potential benefits.” Here are the earlier posts on this situation.
PGE is Oregon’s largest utility with about 755,000 customers. Texas Pacific is the closely-owned Fort Worth investment firm that has been trying to buy PGE out of Enron’s bankruptcy estate for more than a year despite widespread public resistance in Oregon. Even such major industrial customers of the utility such as Intel Corp. came out against the deal.
State law required the state regulators to decide whether ratepayers would benefit from the takeover and that no public harm would result. Inasmuch as the commission could have approved the deal outright or conditioned approval of a sale on certain additional requirements, the outright denial of the proposed purchase is a crushing defeat for Texas Pacific and Enron creditors.
If Texas Pacific does not win an appeal of the utility commission’s ruling, then Enron’s creditor’s committee will essentially decide what to do with PGE. The two most likely results are just to distribute new stock of the utility among Enron creditors or reopen the bidding for the utiity. Representatives of the City of Portland has publicly stated that it would make a bid for the utility.