JUDGE APPROVES $167.5M DELOITTE SETTLEMENT FOR ADELPHIANEW YORK - A U.S. bankruptcy judge has approved a $167.5 million settlement that Deloitte & Touche has agreed to pay to a trust set up by litigants for defunct cable television company Adelphia Communications. Deloitte and the Adelphia Recovery Trust agreed to the settlement in August. Judge Robert Gerber approved it without conducting a formal hearing.
Adelphia and Deloitte have been filing a series of claims against each other, with Adelphia accusing Deloitte of malpractice in its audits of the bankrupt company. The settlement does not cover the trust's claims against Adelphia's former lenders. The trust said that it would continue to pursue the claims.
GIULIANI SETS TAX AGENDA
MANCHESTER, N.H. - Republican presidential candidate Rudolph Giuliani announced his tax proposals, saying that he would make the Bush administration tax cuts permanent, eliminate inheritance taxes and reduce marginal tax rates.
Giuliani said that he would add a permanent child tax credit and would link the alternative minimum tax to the inflation rate to prevent it from snaring more taxpayers. The former New York City mayor criticized the so-called "death tax" on inheritances, saying that he wanted to "give the death tax the death penalty." Giuliani has claimed he cut taxes 23 times while he was mayor. But critics charge that he also left office with a steep budget deficit and that some of the tax cuts he claims were really made by the state.
Giuliani claimed that under Democratic proposals, families of four making $50,000 per year would need to pay an extra $2,000 annually in taxes, and that there would be a $3 trillion tax hike over the next decade if the Bush tax cuts did not become permanent.
REFCO CREDITORS SUE FOR $2B
CHICAGO - Accounting firms Ernst & Young, PricewaterhouseCoopers and Grant Thornton were among those named in a $2 billion lawsuit filed by representatives of the creditors of bankrupt financial company Refco.
Also named in the suit were legal and financial advisors to the company, which collapsed amid allegations of "round-trip loans" made to cover up heavy losses. In addition to the accounting firms, the Refco Litigation Trusts sued Refco's law firm, Mayer, Brown, Rowe & Maw, along with Banc of America Securities, Credit Suisse Securities, Deutsche Bank Securities, Ingram Micro, former Refco CEO Philip Bennett and other former executives.
Refco filed for bankruptcy in October 2005, two months after going public and shortly after the company revealed that it had piled up $430 million in debt. The suit accused the firms of helping Refco cover up the debt, alleging that the "fraudulent scheme only could have worked with the active assistance of Refco's cadre of outside auditors, professionals and advisors."
The suit charged that the scheme helped Refco executives sell off their interests before revealing the extent of the debt load, while the firms earned fees for their work in assisting with the plan. Bennett and other former Refco execs face a criminal fraud trial in October, but have pleaded not guilty.
