Monthly Archives: November 2005

Certain KPMG tax shelter civil suits stayed

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kpmg logo36.jpgIn an interesting development, U.S. District Judge Vaughn R. Walker in San Francisco stayed a series of civil lawsuits over the legality of some KPMG LLP tax shelters pending the outcome of parallel criminal proceedings against certain of the individual defendants in New York. Prior posts on the KPMG tax shelter cases are here.
Normally, it’s the defendants who are facing criminal charges in parallel criminal proceedings who seek a stay of the civil lawsuit over the same subject matter. The argument in favor of a stay is that a defendant should not be required to choose between asserting the privilege against self-incrimination, on one hand, and effectively defending a civil lawsuit, on the other, while a criminal investigation of the subject matter involved in the civil lawsuit is ongoing.

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Keeping up with Merck’s Vioxx cases

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merck_logo6.jpgWell, it’s only two down and about 6,500 to go, but last week’s take nothing verdict in the latest Merck/Vioxx trial evened Merck’s record in the Vioxx cases at 1-1 (earlier posts on Merck and Vioxx are here). Since that verdict, I have been meaning to pass along that Ted Frank and Walter Olson over at PointofLaw.com have created this handy Vioxx case page where you can keep up with developments in the Merck/Vioxx cases. Check it out.

The effect of failed urban economics on the French riots

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French Revolution2.jpgJoel Kotkin is an Irvine Senior Fellow at the New America Foundation, the author of The City: A Global History (Modern Library, 2005) and a friend of Houston Strategies’ Tory Gattis. Mr. Kotkin came to my attention recently for his insightful writings on urban planning (here and here) during the aftermath of Hurricane Katrina.
In this OpinionJournal op-ed, Mr. Kotkin addresses the unintended consequences in France of governmental policies such as high taxation, the welfare state and the economic barriers to entry caused by excessive regulation:

The French political response to the continuing riots has focused most on the need for more multicultural “understanding” of, and public spending on, the disenchanted mass in the country’s grim banlieues (suburbs). What has been largely ignored has been the role of France’s economic system in contributing to the current crisis. State-directed capitalism may seem ideal for such American admirers such as Jeremy Rifkin, author of “The European Dream,” and others on the left. Yet it is precisely this highly structured and increasingly infracted economic system that has so limited opportunities for immigrants and their children. In a country where short workweeks and early retirement are sacred, there is little emphasis on creating new jobs and even less on grass-roots entrepreneurial activity.

Read the entire piece.

Guidant: “Spitzer is no stinking MAE”

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guidant_logo_web.jpgUndeterred by the Lord of Regulation’s entry into the dispute, troubled medical-device maker Guidant Corp. filed a lawsuit yesterday in New York City against disenchanted merger partner, Johnson & Johnson. Guidant is attempting to persuade the court to overrule J&J’s stance that Guidant’s recent troubles constitute a “material adverse effect” on Guidant’s business that allows J&J to walk away from its proposed $25.4 billion merger ($76 per share) with Guidant that the companies announced last December.

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More on the talented Mr. Munitz

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munitz6.jpgFormer University of Houston chancellor and current J. Paul Getty Trust president Barry Munitz probably didn’t even notice this earlier post regarding his mercurial career in public life.
But I bet even the talented Mr. Munitz notices when the New York Sunday Times dedicates a long article to the current troubles of the Getty Trust.

Final PGA Tour Money List

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PGA_TourLogo.gifWith Brad Bryant’s surprisingly easy win in the season-ending Tour Championship yesterday, the PGA Tour’s all-important money list is final for the 2005 season. Some interesting notes:

Tiger Woods won again with over $10.6 million in winnings, which works out to be over half a million per tournament that he enteded in 2005.
It took a cool $626,736 in winnings to make the top 125, which is a coveted position because the 125 top money-winners from the 2005 season are exempt from qualifying for most PGA Tour events during the upcoming 2006 season.
Three 2004 Nationwide Tour graduates made the top 125, but ten 2004 Q-School graduates made the list and two Q-school grads (Sean O’Hair and Lucas Glover) finished in the top 30.
Apart from Gatesville’s Bryant at no. 9 with almost $3.25 million in winnings, Justin Leonard of Dallas was the top Texan money-winner at no. 12 with over $2.6 million in winnings, followed by Chad Campbell of Andrews at no. 20 with almost $2.4 million. The Woodlands resident K.J. Choi came in at no. 37 with over $1.7 million in earnings, while Steve Elkington of Houston’s Champions Golf Club had a comfortable bounce back year at no. 54 with over $1.4 million.
54 year old Tom Kite‘s plan to play the regular PGA Tour in 2005 resulted in just 11 tournaments and a bit over $100,000 in winnings, placing him 217th on the list.
The sad golfing saga of David Duval continues, as the former no. 1 golfer in the world came in 260th on the money list with just a bit over $7,500, which works out to be a Tour-low $381.50 per tournament.

Mr. Duval — who continues to have an exemption into most tournaments because of his 2001 British Open and 2000 Players’ Championship victories — may be carrying his own bag in future tournaments at that earning level.

Another one bites the dust

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Independence Air logo.gifFlyi Inc., which spun off a year ago into the low-fare independent airline called “Independence Air” after beginning as a contract carrier for United Airlines and Delta Air Lines Inc., filed a chapter 11 case early Monday morning, joining a good part of the American airline industry in keeping the bankruptcy bar fat and happy.
Meanwhile, just to remind you that markets often work in mysterious ways, airline stocks are rebounding.

Willy Taveras should not be the NL ROY

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Taveras2.jpgI understand that the Stros’ public relations department wants centerfielder Willy Taveras to be the National League Rookie of the Year, but why does the Chronicle lap up such nonsense with unqualified support?
As noted in this previous post, Taveras did reasonably well this season jumping from Double A ball to the Major Leagues, but he remains a decidedly below-average player in the most important aspect of baseball, which is creating runs so that your team can score more than the opposition and win games. Taveras generated 13 fewer runs this season than an average National League hitter would have generated in the same number of plate appearances (“RCAA“).

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Thinking about the source of the French riots

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French Revolution.jpgRioting across France hit a new peak during the 11th night of rioting last night, as the violence — initially centered in the Paris suburbs — worsened elsewhere in France. From the original outburst of violence in suburban Paris housing projects, the violence has expanded into a widespread show of disdain for French authority from youths, mostly the children of Arabs and black Africans who are the products of high unemployment, poor housing and discrimination in French society. This Opinion.Telegraph piece provides a British perspective on the current situation.
Interestingly, Theodore Dalrymple — the pen name of British psychiatrist and author, Anthony Daniels — predicted all of this back in 2002 in this City Journal piece on the developing European underclass:

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2005 Weekly local football review

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Romance Taylor.jpgTexas Longhorns 62 Baylor 0.

The Longhorns (9-0; 6-0 Big 12) relentless march to the BCS National Championship Game against USC continued on Saturday as the Horns barely broke a sweat in racing past undermanned Baylor and Miami took care of Virginia Tech‘s dream of sneaking past the Horns in the BCS standings. The Horns face a scrimmage against Kansas at home, a rivalry game against a demoralized Aggie team in College Station, and a reasonably competitive game against Colorado in the Big 12 Championship game in in early December at Reliant Stadium. But make no mistake about it — this Texas team is making its reservations for Pasadena in the first week of January and only a huge upset could scuttle those plans.

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