Channeling Lay, Skilling and Fastow - More Woes for General Growth Properties
Mall developer being investigated by class action law firm for E nron like behavior The woes continue for Chicago-based mall developer...
https://www.elkgrovenews.net/2008/11/channeling-lay-skilling-and-fastow-more.html
Mall developer being investigated by class action law firm for Enron like behavior
The woes continue for Chicago-based mall developer General Growth Properties.
Aside from being on the brink of bankruptcy, the beleaguered developer now faces the spector of a class action lawsuit by the Cincinnati-based law firm of Statman, Harris & Eyrich. In a press release the firm said it "is investigating General Growth Properties, Inc. ("Company") (NYSE:GGP) for potential violations of the Employee Retirement Income Security Act of 1974 ("ERISA") relating to the General Growth 401(k) Savings Plan."
The press release goes on to say that it "is investigating whether the Company and/or other administrators of the Plan breached their ERISA-mandated fiduciary duties of loyalty and prudence to participants and beneficiaries of the Plan. A breach may have occurred if the fiduciaries failed to manage the assets of the Plan prudently and loyally by investing the assets in Company stock when it was no longer a prudent investment for participants' retirement savings."
If we are to interpret this, it seems to say that GGP compelled it's 401-k participants to contribute some portion of their monies into GGP stock. As readers of this news site are well aware, GGP's share have gone from $49 a share all the way down to $1.00 as of yesterday.
As you may recall, when Enron collapsed, it's employees 401-k retirement savings were wiped out as Enron stock was the only investment available in the plan. This, along with other shenanigans landed Fastow and Skilling in jail.
Will the same fate fall on GGP executives? We seem to know what has happened to the employees.
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(Scroll down to what California loses in this dodge)
Congress Should Approve Bills Introduced in House and Senate to Shut Down Treasury's $140 Billion Give-Away to Banks
November 24, 2008, Tax Justice blog
Last week, House and Senate offices received a letter signed by Citizens for Tax Justice, the Coalition on Human Needs, and OMB Watch, asking Congress to reverse a Treasury notice that essentially told banks that they could ignore an explicit provision in the revenue code intended to prevent abusive tax shelters. The notice, dubbed the "Wells Fargo ruling," after its largest beneficiary to date, will cost the federal government $140 billion according to one widely-cited analysis.
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As the letter sent to the Hill explains, IRS Notice 2008-83 essentially repeals, for banks only, Section 382 of the tax code, which bars companies from using the losses of companies they acquire to reduce their own tax liability. Section 382 was enacted by Congress in 1986 to stop companies from sheltering their income by purchasing shell companies with losses on their books. Before that time, many mergers took place not because they made economic sense but merely because they offered a tax shelter. Ever since Section 382 was enacted to end these abuses, corporate lobbyists have been promoting its repeal.
Now it seems those lobbyists have achieved their goal without using the same long and difficult legislative process that lawmakers and advocates face when they want to enact, say, a $3 billion increase in the child tax credit for low-income families. Instead, bank lobbyists achieved their $140 billion goal through an agency action that contradicts the explicit intent of a statute enacted by Congress.
Another alarming aspect of the Wells Fargo ruling is its impact on states. As CTJ's recent report explains, because most state corporate taxes are linked to the federal corporate tax, a cut in the federal corporate tax leads to a reduction in state revenues as well. It has been reported that the total loss in state revenue for California alone will be $2 billion, and $300 million of that will be lost this year.
Many lawmakers and analysts are rightly concerned about the economic effects of any change in tax law enacted by Congress. But that can be no excuse to leave unchallenged a $140 billion tax subsidy for bank mergers created in direct contradiction to a law enacted by Congress. The House and Senate will likely meet in December to consider a bailout for the automotive industry and other legislation to boost the economy.
During that time, they should approve legislation to reverse the Wells Fargo ruling.
Way to go Bob and Lisa Lent - Losers of the Years - Hey Lisa - Shop till you drop....
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