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Weekly Issues in the News

By Geisa Balla

Betsey Johnson

U.S. design house Betsey Johnson LLC filed for Chapter 11 bankruptcy protection on April 26, 2012 in the U.S. Bankruptcy Court, Southern District of New York. It listed $21.3 million in assets and $15.4 million in liabilities as of the end of 2011. In its petition, Betsey Johnson cited sales and profitability for the bankruptcy filing, stating that its retail store sales have fallen 20% and profitability has dropped by more than 50% since 2007. The company is seeking offers to buy all or parts of its business, and has not been able to find buyers or investors so far. "The economic recession had a devastating impact on higher-end fashion apparel brands, including Betsey Johnson Fashions," the company said, adding that cash constraints had left it unable to turn the situation around. For fiscal year ending December 31, 2011, Betsey Johnson generated $60 million in sales, but recorded a negative EBITDA of $5.7 million.


Google Books

In the ongoing Google Books dispute, Google Inc. argued this week that associations of authors and photographers should not be allowed to sue the company as a group. The Authors Guild and the American Society of Media Photographers filed their lawsuit against Google, alleging that Google infringed on copyrights when it signed contracts with libraries for scanning, distributing and displaying about 20 million books. The attorney for the Authors Guild said that Google was an "intimidating defendant" for individuals, and that this "action calls out for a mass litigation to adjudicate the mass digitization." Judge Denny Chin did not issue a decision, but noted in oral arguments that it would take forever to resolve cases brought by individual authors, and that it "seemed to make sense" to consider the lawsuit as a group. This litigation began seven years ago over Google's desire to create the world's largest digital library. In March 2011, judge Denny Chin rejected a settlement in the matter over antitrust and copyright concerns.


Kurt Cobain

Courtney Love continues to lose control over the estate of her late husband, Nirvana front man Kurt Cobain. In 2009, Love lost custody of the couple's only daughter Frances Bean Cobain. Recently uncovered documents now show that Frances Bean has taken over control of the publicity rights for Kurt Cobain's name, likeness and appearance. The Fix reports that "the documents show that Love agreed to step down as Acting Manager of End of Music LLC--the business entity responsible for generating cash from Cobain's publicity rights--once she'd received a $2.75 million loan from Frances' trust fund in 2010 . . . Until Courtney pays it back, she won't receive a dime from Kurt's name, likeness or appearance from the deals formed by Frances and her advisers since December 2010." Frances also has the final say in business agreements of End of Music LLC. Courtney Love remains a company member, but has no power to make decisions on anything bearing the likeness of Cobain.


Greg Mortenson

The U.S. District Court for the District of Montana dismissed a class-action fraud lawsuit against Greg Mortenson, author of bestselling book "Three Cups of Tea." The lawsuit alleged that Mortenson fabricated much of the story in his book about promoting education for girls in Pakistan and Afghanistan. It also alleged that Mortenson and his publisher and non-profit Central Asia Institute fabricated material intended "to induce unsuspecting individuals to purchase his books and donate to [Central Asia Institute]. The court dismissed the lawsuit for the ""imprecise, in part flimsy, and speculative nature of the claims and theories advanced" by the plaintiffs. The lawsuit was filed in May 2011, after a "60 Minutes" program that disputed the author's account, and stated that his institute was largely being used to promote the author's book. The Montana Attorney General also investigated Mortenson's claims, and Mortenson acknowledged that less than half of his institute's proceeds were used to build schools, but that "much of the remainder was spent on CAI's other charitable programs." Mortenson entered into a settlement with the Montana Attorney General, agreeing to pay $1 million to compensate his Montana-based charity for using his non-profit to promote and buy copies of his book.


Linda Evangelista

Model Linda Evangelista is asking for a record $64,000 month in child support from millionaire Fran├žois-Henri Pinault for their 5 year-old son. The child could get a total of $807,000 a year in child support, if the Court grants Evangelista's motion. Pinault is the chief executive of PPR, the conglomerate that owns Yves Saint Laurent, Gucci and Bottega Veneta. Pinault's lawyers claim that Evangelista's claim is beyond excessive. Yet Evangelista counters that their child needs armed bodyguards and his own driver. When questioned by the court as to why her son needs around-the-clock nannies and how much she works, Evangelista responded that when she works, it can be a 16-hour day. "On days when I do not work, I am working on my image. I have to hit the gym. I have beauty appointments. I have to work toward my next job and maintaining my image, just like an athlete."


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This page contains a single entry from the blog posted on May 4, 2012 3:51 PM.

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