Thursday PM August 2nd, 2007

Federal appeals court rules against Hurricane Katrina victims over insurance policies covering flood damage caused by levee breaches...KBR posts 52 percent higher income than last year's second quarter...NatWest Three's Enron-related trial postponed until January...

A federal appeals court has ruled against Hurricane Katrina victims who argue their insurance policies should have covered flood damage caused by levee breaches that flooded 80 percent of New Orleans. The U.S. Fifth Circuit Court of Appeals says the event was excluded from coverage under the plaintiff's insurance policies. The panel overturned a November decision that sided with policyholders arguing that language excluding water damage in some policies was ambiguous. The judge said the policies did not distinguish between an act of God, such as floods, or by an act of man, such as levee breaches. The case could affect thousands of residents and business owners trying to rebuild in Louisiana. One insurance expert says had the ruling gone the other way, it could have cost insurers a billion dollars. More than a dozen insurance companies, including Allstate and Travelers, were defendants in the case.

The Bush administration has made little progress in awarding contracts for Hurricane Katrina work to small, local firms along the Gulf Coast. A Congressional analysis finds the federal government has lagged, and in some cases, backtracked, in awarding contracts to small Gulf Coast businesses. According to a review of contracts from five federal agencies, small businesses in Louisiana have had an overall net loss of nearly $9 million in contracting work since April, when the agencies pledged to give smaller companies their share of the work. The review also finds the agencies falsely reported awarding 259 contracts to small businesses, when in fact they went to large companies or ineligible recipients.

Former Halliburton subsidiary KBR posted a second-quarter net income 52 percent higher than last year's quarter. The Houston-based engineering, construction and military contractor credits a lift from the sale of its share of a British dockyard. Earnings for the April-June period amounted to $140 million. Revenue was relatively flat at $2.15 billion in the most-recent period. KBR says earnings from continuing operations in the second quarter saw more than a tenfold increase to $50 million. KBR said in late June it had completed the $350 million sale of its stake in Devonport Management Limited to UK-based support services group Babcock International Group. KBR owned 51 percent of Devonport Management, which owns and manages the Devonport Royal Dockyard. That's Western Europe's largest dockyard. KBR said it sold the business to focus on its engineering, construction and services offerings to industrial, government and military customers.

Employers nationwide are preparing to fire workers with questionable social security numbers. The firings come as businesses try to avoid getting caught in a crackdown on illegal immigrants. The Homeland Security Department is expected to soon make public new rules for employers notified when a worker's name or social security number is flagged by the Social Security Administration. The rule, as initially drafted, requires employers to fire people who can't be verified as a legal worker and can't resolve within 60 days why the name or social security number on their W-2 form doesn't match the government's database. Employers who don't comply could face fines of $250 to $10,000 per illegal worker and incident. Pittsburg-based poultry processor Pilgrim's Pride confirms that it recently fired employees at two Texas plants, as first reported in the Fort Worth Star-Telegram. Tyler nursery owner Mark Chamblee says the stricter rule could mean losing some of his 28 workers.

The trial of three former Greenwich NatWest bankers in an Enron-related case has been postponed until January 7th, accommodating a lawyer's schedule. The three British citizens had been set for trial in Houston on October 22nd. They were extradited a year ago, and must remain in Houston until trial. David Bermingham, Giles Darby and Gary Mulgrew are accused of plotting, with former Enron CFO Andy Fastow, to steal $7 million by deceiving NatWest about the value of the banks' stake in an Enron off-the-books partnership controlled by Fastow.

Texas Attorney General Greg Abbott announced multiple citations against Life Time Fitness Centers over concerns about possible ID theft. Investigators discovered records containing customer personal information dumped in trash bins outside some Dallas-area Fitness Centers. From April to June, more than 100 records were found in publicly accessible trash bins in Plano, Allen, Flower Mound, Colleyville, Dallas and Garland. A call for comment to Eden Prairie, Minnesota,-based Life Time Fitness wasn't immediately returned. The company is accused of violating the 2005 Identity Theft Enforcement and Protection Act, plus the Texas Deceptive Trade Practices Act. Life Time Fitness also was cited for violations of the Health Spa Act which allege it operated several Texas locations without being registered with the Secretary of State.

Tags: News


Share Options