FDIC to pay MAXXAM.
The judgment represents the largest sanction against the Federal government and incorporates MAXXAM's requests that MAXXAM be reimbursed its reasonable costs and attorney's fees. MAXXAM filed a motion to sanction the FDIC for filing a law-suit that the FDIC's own legal division's internal analysis concluded had "at least a 70%" chance of failing on pretrial motions and, if it survived, the chances of prevailing on the merits were "marginal at best." The FDIC's standards call for at least a 50% chance of success before initiating legal action.
Prior to the FDIC lawsuit, the FDIC had paid off millions of dollars to the Office of Thrift Supervision (OTS) to initiate administrative action against MAXXAM, Texas-based businessman Charles Hurwitz (who controls 77% of MAXXAM), and others. The litigation that began 1995 sought US$ 821 million in restitution and civil money penalties. It ended when the OTS settled with MAXXAM and Hurwitz in October 2002 for $206,000; the respondents made no admission of wrongdoing.
ABOUT THE AUTHOR
The WorldWatch section in Solutions! magazine is written by Sara M. Scharpf, a writer based in Oshkosh, Wisconsin, USA. Contact her by email at firstname.lastname@example.org.
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|Title Annotation:||INDUSTRY NEWS|
|Author:||Scharpf, Sara M.|
|Publication:||Solutions - for People, Processes and Paper|
|Date:||Oct 1, 2005|
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