Feb 9 (Reuters) – The U.S. judge overseeing MF Global’s bankruptcy plans a closer review before deciding whether any of an estimated $190 million of insurance coverage for former company executives should instead go to customers.

Opponents of the plan to cover former executives, including at least four customer groups, believe the funds should not go to people they hold responsible for the collapse of the futures brokerage. The $190 million includes at least $120 million covering the period surrounding the company’s demise.

MF Global Holdings Ltd, which was run by former New Jersey governor and U.S. senator Jon Corzine, filed for bankruptcy protection on Oct. 31.

U.S. Bankruptcy Judge Martin Glenn at a Thursday hearing in Manhattan also authorized the hiring of several law and consulting firms to assist Louis Freeh, MF Global’s bankruptcy trustee and a former FBI director, and James Giddens, the bankruptcy trustee for the MF Global Inc broker-dealer unit.

The judge nonetheless expressed “concern about the proliferation of professionals” involved in the parent’s bankruptcy case.

The $190 million would be reserved to pay legal and other costs for onetime executives of the brokerage.

The insurance was provided by the company’s MFG Assurance Co insurance unit, and had been prepaid for the period from May 2011 to May 2012, a lawyer for the insurer told Glenn.

Feb 8 (Reuters) – A federal judge refused to dismiss an antitrust lawsuit accusing Citigroup Inc and Discover Financial Services of conspiring to force credit card holders to agree to mandatory arbitration clauses in their cardholder agreements, and refusing to issue cards to people who did not agree.

Citigroup and Discover are the final defendants facing claims over arbitration clauses in the decade-old, nationwide case overseen by U.S. District Judge William Pauley in Manhattan.

Bank of America Corp, Capital One Financial Corp and JPMorgan Chase & Co are among other card issuers that have settled.

Citigroup spokeswoman Emily Collins and Discover spokesman Jon Drummond declined to comment.

Another part of the litigation accuses card issuers of conspiring to fix foreign currency conversion fees.

Pauley said it was premature to dismiss the collusion claims over arbitration clauses, citing among other factors “each defendant’s decision to adopt an arbitration clause that roughly mirrored those used by its competitors.”

He also noted the defendants’ frequent attendance between 1999 and 2003 at meetings with rivals to discuss arbitration, and said the “voluminous record” in the case “could suggest that defendants used the meetings to concoct a conspiracy to adopt arbitration clauses and boycott consumers who rejected them.”

Feb 8 (Reuters) – BP Plc won a court order keeping several potentially damaging emails out of a scheduled trial to determine responsibility for the 2010 Gulf of Mexico oil spill.

Wednesday’s ruling by U.S. Magistrate Judge Sally Shushan in New Orleans came a day after U.S. District Judge Carl Barbier rejected the oil company’s effort to keep evidence about settlements it had already reached out of the trial.

The rulings came as Barbier prepares to preside on Feb. 27 over a non-jury trial to assign blame for the April 20, 2010 explosion of the Deepwater Horizon rig, which killed 11 people and caused the largest offshore oil spill in U.S. history.

Plaintiffs include individuals and businesses, represented by a plaintiffs’ steering committee that had sought to introduce the email evidence, as well as states and the U.S. government.

The main corporate defendants include BP, rig owner Transocean Ltd and Halliburton Co, which provided cementing services for the Macondo oil well. Anadarko Petroleum Corp, one of BP’s partners in the well, is also involved in the trial.

Shushan granted BP’s request to exclude as hearsay several 2009 emails among Anadarko employees about tropical storm damage to another Transocean rig that had been under contract to BP.

In one email, an Anadarko employee expressed disappointment that BP had not disclosed some information related to the damage, prompting another to respond: “Bummer. I’m amazed that they did not tell us about this.”

Feb 8 (Reuters) – Ericsson, the world’s largest telecommunications network equipment maker, has been sued for more than $330 million by a Massachusetts broadband network company that accused it of stealing trade secrets and trying to drive it out of business.

Airvana Network Solutions Inc, founded in 2000 by former Motorola Inc executives, said Ericsson secretly joined with a Korean partner to develop “knock-off” hardware based on Airvana technology, and which could then be sold to wireless carriers Verizon Wireless and Sprint Nextel Corp.

It said Ericsson breached its contract in an effort to extract concessions, or force Airvana to fold or sell itself to the Swedish company for an artificially low price.

Airvana said Ericsson is “effectively” its only customer. It also accused Ericsson of hiring one of its software engineers in violation of a noncompetition agreement.

“If Ericsson is able, even temporarily, to displace Airvana with a wrongfully developed ‘in-house’ product, Airvana will face an immediate and precipitous decline in its revenues and may be rendered unable to meet its obligations,” Airvana said in its complaint filed with the New York state court in Manhattan.

Airvana’s lawsuit also seeks 9 percent interest on damages from the middle of 2010, when the privately held company said Ericsson’s in-house product had “reached the ‘market ready’ planning stage.”

An Ericsson spokeswoman declined to discuss the lawsuit, but said the Kista, Sweden-based company is “committed to supporting our customers and will take appropriate action to protect both their interests and those of Ericsson.”

Feb 7 (Reuters) – A federal judge rejected BP Plc’s effort to keep evidence about settlements out of the upcoming trial to decide who is responsible for the 2010 Gulf of Mexico oil spill.

Tuesday’s ruling by U.S. District Judge Carl Barbier in New Orleans, scheduled to preside in a non-jury trial beginning Feb. 27, is a victory for Halliburton Co, which had provided cementing services for the Macondo oil well.

The Houston-based company had argued that evidence of settlements or negotiations could show the settling companies’ potential bias in BP’s favor, which Halliburton could then use in its defense.

BP countered that excluding such information was consistent with federal rules on evidence, and that such details are irrelevant to establishing liability.

Barbier concluded that the London-based oil company’s request was premature, even though there were “plausible scenarios” in which settlement evidence could reflect bias.

“The proper course is to wait until any settlement evidence is actually sought to be introduced to determine admissibility,” he wrote.

BP has reached settlements with two partners in the Macondo well: $4 billion with Anadarko Petroleum Corp, and $1.065 billion with Mitsui & Co’s MOEX unit.

By Jonathan Stempel

(Reuters) – Investors suing Bank of America Corp (BAC.N: Quote, Profile, Research, Stock Buzz) won class-action status for their lawsuit accusing the bank of fraudulently misleading them about the 2008 takeover of Merrill Lynch & Co and the size of Merrill’s losses and bonus payouts.

U.S. District Judge P. Kevin Castel in Manhattan on Monday rejected the second-largest U.S. bank’s argument that the investors could not prove they suffered losses by relying on materially misleading statements or omissions.

Among the other defendants who were also sued and opposed class certification were former Bank of America Chief Executive Kenneth Lewis, former Merrill Chief Executive John Thain, former Bank of America Chief Financial Officer Joe Price, and Bank of America’s board of directors.

Lewis had won initial praise for saving Merrill from possible collapse when he agreed to buy it on September 15, 2008, the day Lehman Brothers Holdings Inc (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) went bankrupt.

But investors later faulted the bank for not disclosing the scope of Merrill’s soaring losses, which reached $15.84 billion in the fourth quarter of 2008, before December 2008 shareholder votes on the merger. They also objected to Merrill’s having paid $3.6 billion of bonuses despite the losses.

Merrill losses forced Bank of America in January 2009 to get a second bailout from the federal Troubled Asset Relief Program, and contributed to a 93 percent drop in the Charlotte, North Carolina-based bank’s stock price.

Feb 6 (Reuters) – A shortfall in customer funds at MF Global Holdings’ (MFGLQ.PK: Quote, Profile, Research) broker-dealer unit grew in the days before the company went bankrupt, as client money increasingly was used to pay for MF’s daily activities, said the trustee liquidating the broker-dealer.

James Giddens, the trustee for MF Global Inc, said in a statement Monday that his investigation has revealed that MF Global personnel increased the company’s use of customer money as liquidity dried up in the five days leading up to the bankruptcy of its parent, MF Global Holdings Ltd.

The trustee has not changed his estimate that a total of about $1.2 billion is missing from customer segregated accounts, said Kent Jarrell, a spokesman for Giddens.

Giddens said that his investigation found that as part of MF Global’s regular practices, the company used customer money in small amounts of less than $50 million for corporate needs.

But Giddens said that as MF Global’s financial position worsened last fall, with exposure to $6.3 billion in risky European debt, “much larger amounts” of customer money were used, “apparently with the assumption that funds would be restored by the end of the day.”

The end result was that the company could not replenish customer accounts. MF Global’s parent filed for bankruptcy on Oct. 31.

Giddens said his legal team has traced a majority of cash transactions, totaling more than $105 billion, made in the last week prior to the bankruptcy.

Feb 6 (Reuters) – JPMorgan Chase & Co has agreed to pay $110 million to settle consumer litigation accusing it of charging excessive overdraft fees.

The largest U.S. bank by assets joined Bank of America Corp and several smaller lenders in settling their portion of the nationwide litigation.

Consumers had accused more than two dozen lenders of routinely processing transactions from largest to smallest rather than in chronological order.

This can cause overdraft fees, typically $25 to $35, to pile up because account balances fall faster when larger transactions are processed first. Critics say this disproportionately burdens customers with lower incomes and balances.

JPMorgan’s settlement in principle was disclosed in a filing on Friday with the U.S. district court in Miami. The settlement requires negotiation of final documentation and approval by U.S. District Judge James Lawrence King, who oversees the nationwide litigation. The accord also calls for an unspecified change to the New York-based bank’s overdraft practices.

JPMorgan spokesman Patrick Linehan said the bank was pleased to settle in principle. A lawyer for the plaintiffs did not immediately return a call seeking comment.

In September 2009, JPMorgan said it would henceforth post debit card transactions and ATM withdrawals as they occur, and end debit card overdrafts unless customers ask for them.

Feb 6 (Reuters) – Global Aviation Holdings Inc, the largest commercial provider of chartered flights for the U.S. military, has filed for bankruptcy protection, citing the U.S. pullout from Iraq, defense spending cuts, and high debt and labor costs.

The parent of North American Airlines Inc and World Airways Inc filed for Chapter 11 protection in a Brooklyn, New York, bankruptcy court, less than two weeks after the Pentagon outlined a 2013 budget plan to reduce spending by $487 billion over the next decade.

Flying soldiers and cargo make up more than three-fourths of Global Aviation’s revenue. The United States has withdrawn its troops from Iraq, and U.S. Defense Secretary Leon Panetta last week said the United States intends to end combat operations in Afghanistan before the end of 2013.

“Every individual major defense contractor that we work with has been downsizing,” said Wayne Plucker, an aerospace and defense industry analyst at the consulting firm Frost & Sullivan in San Antonio. “That has had an effect on smaller companies: If Boeing catches a cold, others get pneumonia. Services providers will be the hardest hit as larger companies and the Department of Defense itself do more of that work in-house.”

In the nine months ended Sept. 30, Global Aviation lost $60.3 million on revenue of $775.1 million, compared with a year-earlier loss of $6.9 million on revenue of $877 million.

Global Aviation said it has also struggled with excess debt and “unsustainable” labor costs. It said its restructuring effort was “derailed” on Dec. 27 when a federal appeals court in Chicago threw out a $71.3 million award against FedEx Corp , a decision now being appealed.

“While Global Aviation has navigated fluctuations in demand in the past, the current decrease, coupled with high labor and fixed costs, excess aircraft and an overleveraged balance sheet, requires Global Aviation to restructure,” Chief Financial Officer William Garrett said in a court filing.

Feb 3 (Reuters) – Carlyle Group LP, a giant private equity firm that has filed for an initial public offering, has dropped a controversial effort to require its future shareholders to resolve claims through arbitration rather than in court.

The Washington, D.C.-based firm, with $148 billion of assets under management, said on Friday it made the change after consulting with the U.S. Securities and Exchange Commission, which must approve any plans to go public, as well as investors and other interested parties.

Private equity firms that go public traditionally offer shareholders little say in governance, offering “units” that confer limited voting rights and no ability to remove the general partner.

But in a regulatory filing on Jan. 10, Carlyle went one step further, requiring arbitration of any disputes and barring shareholders from pursuing individual or class-action lawsuits in court. Friday’s decision drops that limitation.

“I’m enormously pleased that Carlyle has not only done the right thing for itself, but also set an example for others contemplating IPOs and, hopefully, sent a message to the financial community about the unfairness of arbitration,” Sen. Richard Blumenthal, a Connecticut Democrat who had opposed the arbitration requirement, said in a telephone interview.

In a statement on Friday, Carlyle said it first proposed requiring arbitration, “because we believed that arbitrating claims would be more efficient, cost effective and beneficial to our unitholders.”

The firm sent a somewhat different message in the Jan. 10 filing, telling prospective shareholders that requiring arbitration could mean their “cost of seeking and obtaining recoveries may be higher than otherwise would be the case.”