Cineworld Ordered to Pay Cineplex Damages Over Soured Merger

A Canadian court ordered Cineworld Group PLC to pay 1.29 billion Canadian dollars, equivalent to about $1 billion, in damages for walking away from a merger agreement with Cineplex Inc. after the COVID-19 pandemic seriously impacted the movie theater industry worldwide. Cineworld argued that Cineplex violated the terms of a planned merger between the two companies when it took steps to conserve cash by deferring payments to landlords, vendors and film studios after box offices shut down in the early days of COVID-19’s global spread. However, an Ontario judge rejected the arguments. Cineworld, which operates the Regal cinema chain in the U.S., said it would appeal the decision and “does not expect damages to be payable whilst any appeal is ongoing.” It reported about $450 million in cash holdings as of June and previously said it expected “no material liability” to arise from the Cineplex lawsuit. The U.K.-based company warned earlier this year there was doubt about its viability as a business after it posted a $3 billion loss for 2020 because of the pandemic’s impact. Cineplex had sought US$2.2 billion in damages from Cineworld for backing out of the acquisition.

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Nassar Victims Reach $380 Million Settlement With USA Gymnastics and U.S. Olympic and Paralympic Committee

USA Gymnastics, U.S. Olympic & Paralympic Committee and their insurers have agreed to fund a $380 million settlement with victims of longtime national team physician Larry Nassar, drawing to a close a five-year legal battle that has upended American Olympic sports governance. This settlement is among the largest ever recorded for victims of sex abuse and includes hundreds of athletes who were assaulted over 30 years. The final holdout insurer, TIG Insurance Company, made the decision to pay a substantial share of the settlement was confirmed in a hearing in bankruptcy court in Indianapolis. The settlement will include claims from Olympic gold medalists such as Simone Biles, McKayla Maroney, Aly Raisman, who were treated by Nassar during his time as the U.S. women’s squad doctor. It also includes gymnasts competing gymnasts competing for local clubs who sought treatment from Nassar on the strength of his national reputation, and a handful of victims of abusive coaches who had been pursuing claims against the sport’s governing bodies.

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Former Financial Advisor Sentenced to 14 Years in Federal Prison for $12 Million Fraud that Caused Clients to Lose Retirement Savings

Paul Ricky Mata, a former financial advisor, was sentenced to 168 months in federal prison for a real estate investment con that caused his clients to lose more than $12 million. Mata pleaded guilty to 17 felonies: 11 counts of mail fraud, three counts of wire fraud, one count of making a false statement in a bankruptcy proceeding, one count of concealing assets in bankruptcy, and one count of making a false oath and accounts in bankruptcy. Mata failed to disclose his lengthy disciplinary history, which includes a one-year suspension, a $10,000 fine, and a three-year suspension, to his clients. U.S. District Judge R. Gary Klausner has also ordered him to pay $12,560,385 in restitution to his victims.

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Plaintiff’s Verdict on Retaliation and Hostile Work Environment Affirmed

Warden directed subordinates “to figure out how to stop employees from using Family and Medical Leave Act (FMLA) leave.” Plaintiff was concerned that the directive constituted unlawful disability discrimination, reported the directive to her superiors, and received discipline. Whether that directive was unlawful or not, Human Rights Act protected plaintiff’s report from retaliation as long as plaintiff made the report with “reasonable good faith.” Defendant’s agreement with, or failure to object to, an instruction waives error. Defendant waived error in awarding attorney fees, and applying the lodestar calculation and a multiplier, by failing to raise the same issue on appeal as it did in circuit court. Remanded to determine attorney fees on appeal.

Shelley Gray vs. Missouri Department of Corrections
Missouri Court of Appeals, Western District – WD83739

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IRS issues guidance regarding the retroactive termination of the Employee Retention Credit

The Internal Revenue Service today issued guidance for employers regarding the retroactive termination of the Employee Retention Credit. The Infrastructure Investment and Jobs Act, which was enacted on Nov. 15, 2021, amended the law so that the Employee Retention Credit  applies only to wages paid before October 1, 2021, unless the employer is a recovery startup business.

Notice 2021-65 applies to employers that paid wages after September 30, 2021, and received an advance payment of the Employee Retention Credit for those wages or reduced employment tax deposits in anticipation of the credit for the fourth quarter of 2021, but are now ineligible for the credit due to the change in the law. The notice also provides guidance regarding how the rules apply to recovery startup businesses during the fourth quarter of 2021.

Employers who Received Advance Payments

Generally, employers that are not recovery startup businesses and received advance payments for fourth quarter wages of 2021 will avoid failure to pay penalties if they repay those amounts by the due date of their applicable employment tax returns.

Employers who Reduced Employment Tax Deposits Employers that reduced deposits on or before Dec. 20, 2021, for wages paid during the fourth calendar quarter of 2021 in anticipation of the Employee Retention Credit and that are not recovery startup businesses will not be subject to a failure to deposit penalty with respect to the retained deposits if—

  1. The employer reduced deposits in anticipation of the Employee Retention Credit, consistent with the rules in Notice 2021-24,
  2. The employer deposits the amounts initially retained in anticipation of the Employee Retention Credit on or before the relevant due date for wages paid on December 31, 2021 (regardless of whether the employer actually pays wages on that date). Deposit due dates will vary based on the deposit schedule of the employer, and
  3. The employer reports the tax liability resulting from the termination of the employer’s Employee Retention Credit on the applicable employment tax return or schedule that includes the period from October 1, 2021, through December 31, 2021. Employers should refer to the instructions to the applicable employment tax return or schedule for additional information on how to report the tax liability.

Due to the termination of the Employee Retention Credit for wages paid in the fourth quarter of 2021 for employers that are not recovery startup businesses, failure to deposit penalties are not waived for these employers if they reduce deposits after Dec. 20, 2021.

If an employer does not qualify for relief under this Notice, it may reply to a notice about a penalty with an explanation and the IRS will consider reasonable cause relief.

Courtesy of the Internal Revenue Service

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No Service, No Default

Sheriff’s return of service constituted prima facie evidence of service on the person named on the form, but the form did not correctly describe that person, so the prima facie evidence did not show service. Affidavits contesting whether the person named was in charge of a corporation’s business office did not result in an amendment to the return of service. The return remained deficient, so no service occurred and no personal jurisdiction attached, and the ensuing million-dollar default judgment was void.

Samuel Marti, Appellant, v. Concrete Coring Company of North America, Respondent. Missouri Court of Appeals, Eastern District – ED109282

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Boy Scouts Insurer Chubb to Pay $800 Million in Sex-Abuse Compensation Deal

The Boy Scouts of America, which filed bankruptcy last year over a growing wave of lawsuits from abuse survivors, has apologized. The Boy Scouts reached an $800 million settlement with Chubb Ltd.’s Century Indemnity Co. over childhood sexual abuse within the youth group. This settlement will potentially boost the funds available for abuse victims under its chapter 11 plan and preserve the organization’s mission. The proposed deal caps Chubb’s exposure under the insurance policies it sold the Boy Scouts and is supported by a coalition of law firms representing the bulk of the roughly 82,200 men who filed claims in the organization’s bankruptcy over past abuse.

If approved in bankruptcy court, the settlement would add to the nearly $1.9 billion in compensation already put together from the Boy Scouts’ own assets, affiliated local councils, the Church of Jesus Christ of Latter-Day Saints, and Hartford Financial Services Group, Inc, another insurer. The youth group is under intense pressure to win the backing of abuse survivors for its bankruptcy plan, which would lift the Boy Scouts out of court protection and resolve its financial liability related to decades of failures to protect children from predators.

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Annual Inflation Rises to 6.8 Percent, the Highest Rate Since 1982

Consumer prices surged 6.8% in the year leading into November and 0.8% last month alone as a roaring economy overwhelmed struggling supply chains fueling inflation. The consumer price index (CPI), a closely watched gauge of inflation, rose sharply in November. Economists expected the CPI to rise 0.7% in November and 6.7% annually as inflation rose to the highest rate in 30 years in October. Prices for gasoline, shelter, food and vehicles have driven much of the current inflation rate. Whereas, earlier this year, inflation was driven almost entirely by vehicles, electronics, and other goods affected by a global computer chip shortage but has now spread through many sectors.

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Indiana Bankruptcy Petition Preparer Sentenced in Federal Court

Ronya Phillips of Goshen, Indiana, was sentenced to serve 18 months home detention upon her plea of guilty to two counts of suborning perjury. Phillips was formerly a bankruptcy petition preparer in which she prepared bankruptcy petitions and other documents for debtors who filed cases in the U.S. Bankruptcy Court for the Northern District of Indiana.

As part of her guilty plea, Phillips admitted that she willfully suborned and procured individuals to commit perjury by submitting materially false declarations in federal bankruptcy proceedings. Certain debtors and clients of Phillips reported that she had induced them to falsely state on their bankruptcy documents that they had paid her half the amount they had actually paid her for her services. She also persuaded her clients to testify falsely under oath as to how much they had paid her when questioned by the bankruptcy trustee. Phillips herself also submitted false sworn statements in disclosure that only disclosed half of the money she had actually received from clients.

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Puerto Rico Mayor, Official Charged in U.S. Corruption Case

Ángel Pérez Otero, the mayor of Guaynabo, one of the wealthiest cities in Puerto Rico, was arrested on corruption charges. He faces three counts, including bribery and extortion, and is accused of regularly accepting payments of $5,000 in exchange for awarding contracts to the owner of a construction company. The indictment alleges that the scheme ran from 2019 t0 2021. He was sworn in as mayor in 2017 following a special election after the former mayor, Héctor O’Neill, pleaded guilty to sexual harassment, gender violence and violating an ethics law. . Puerto Rico Gov. Pedro Pierluisi said in a statement that he was disappointed and extremely upset about the arrest. He demanded that Pérez resign immediately as mayor and as president of Puerto Rico’s Federation of Mayors.

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