Countrywide seeks 2nd bailout

www.nypost.com/seven/09112007/business/countryslide.htm

COUNTRYSLIDE
By ZACHERY KOUWE


September 11, 2007 -- Countrywide Financial Corp. is putting together another multi-billion dollar bailout plan as the nation's largest home lender continues to struggle amid the global credit crunch and declines in the housing market, The Post has learned.
Sources familiar with Countrywide's plans said the lender continues to work with Goldman Sachs and law firm Wachtell Lipton Rosen & Katz to structure another strategic investment similar to the deal Bank of America struck last month.

It's unclear at this point who exactly is involved in the investment, but sources said a group that could include J.P. Morgan and Citigroup as well as several hedge funds has expressed interest in Countrywide.

A final deal could be announced by the end of the month, sources said.

Last month, Bank of America paid $2 billion for a new series of non-voting preferred stock in Countrywide, which provides an annual dividend of 7.25 percent and can be converted into common stock at $18 per share. As part of the deal, Countrywide left the door open to issue additional preferred stock or convertible preferred stock.

"Countrywide is in desperate need of cash right now to continue funding mortgages and the credit markets are still largely closed to them," said one source familiar with the company.

Countrywide's chief executive Angelo Mozilo, who announced plans last week to eliminate as many as 12,000 jobs, said recently that interest rate cuts by the U.S. Federal Reserve won't be enough to revive home sales and warned that the U.S. economy is headed for a recession.

"The issues the economy is facing are worse than most people believe," Mozilo said in an interview last Friday with Bloomberg News. Mozilo has been pushing for the government to allow Fannie Mae and Freddie Mac to finance bigger home loans.

Countrywide, which handles one of every five new U.S. mortgages, has been hurt by falling home prices and record foreclosures. The company has billions in medium-term debt coming due in about 90 days and needs to cash to continue operating.

Countrywide's stock plunged by over 5 percent yesterday after analysts at Merrill Lynch and UBS cut their profit estimates on worries over the company's ability to make new loans. The stock, which has fallen over 150 percent this year, closed at a four-year low of $17.21 yesterday.

Making matters worse, Alliance Capital Management, which is owned by giant French insurance company Axa SA, disclosed that it has sold about 31 million shares of Countrywide in the last month. Barclays Global Investors has also sold nearly 25 million shares.

"We think the stock will continue to drift down, as investors lose hope of a near-term recovery," said Merrill analyst Kenneth Bruce. He estimates that the job cuts could save Countrywide roughly $1 billion a year, but that will only offset lower revenues.

With trial date looming, RIAA tries to avoid facing a jury

By Eric Bangeman | Published: September 10, 2007 - 07:52PM CT

The over 20,000 file-sharing lawsuits that have been filed over the past few years share a single distinction: not one of them has made it to trial. The RIAA is trying to keep Virgin Records, et al v. Jammie Thomas from a jury trial, filing a motion for summary adjudication on some specific aspects of the case.
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What the RIAA is after is a ruling from the judge that some of the facts of the case are not in dispute. If that is the case, then there are no issues of material fact that exist to be decided, and therefore no need for a trial by jury. It's the same scenario in Novell v. SCO: all the material facts were decided by the judge last month, so there's nothing left for a jury to decide.

The RIAA is looking for the judge to rule favorably on three issues. First, it wants the judge to rule that the record labels own the copyrights to the songs allegedly shared by the defendant. Second, it wants the judge to agree that the copyright registrations are in order. Those two items may not appear to be that big of deal, but number three is a doozy.

The labels want the judge to rule that the defendant was not authorized to copy or distribute the songs flagged by SafeNet, the RIAA's investigator in this case. If the judge decides those three issues in the labels' favor, the plaintiffs believe that it "will significantly narrow" the outstanding issues and prevent the "unnecessary expense of litigating issues about which there is no dispute."

Thomas is fighting the motion, saying that the plaintiffs need to prove two things: that they are the true copyright owners and that there was an act of infringement. Thomas is confident that should the case go to trial, the verdict will go her way.
Who owns the copyright?

Thomas' attorneys also raise a number of issues about the copyright claims. As part of the original complaint, the record labels attached screenshots of the files the defendant was allegedly sharing and stipulated that they owned the copyright to those songs. But the documentation provided by the labels to support their claims of copyright ownership don't quite add up. Here are a few examples cited by the defendant:
Song      Copyright holder according to the RIAA      Copyright holder according to the certificate of registration
"Appetite for Destruction"      UMG Recordings      The David Geffen Company
"The Comfort Zone"      UMG Recordings      Polygram Records
"Control"      UMG Recordings      A&M Records, Inc.
"Frontiers"      Sony BMG      CBS, Inc.
"Let it Loose"      Sony BMG      CBS, Inc.
"Get a Grip"      UMG Recordings      Geffen Records
"Hysteria"      UMG Recordings      Mercury Records
"If You See Him"      UMG Recordings      MCA Records Nashville

Thomas argues that since she lacks the financial means to conduct a thorough examination of the ownership history (e.g., track the ownership of "Hysteria" from Mercury to UMG) for the songs she is accused of infringing the copyright to, her only opportunity to determine their true ownership is either via discovery or cross-examination at trial. With the documentation provided by the labels "questionable" and "nonconclusive," according to the defendant, her only option is to cross-examine the witnesses.

Her attorneys also note that the labels have not taken advantage of some of the deadlines in this case, including one for filing a partial summary judgment. The conclusion? "The issue involved is far too material to preclude cross examination by defendant, therefore plaintiffs’ motion should in all respects be denied."

Perhaps the biggest reason that the RIAA doesn't want this—or any other—case to go to trial is the possibility of losing. The RIAA has fought the exoneration efforts of every defendant tooth and nail, trying to simply walk away from the litigation by dismissing it without prejudice. A handful of defendants have managed to be exonerated, most notably Debbie Foster, Patricia Santangelo, and Tanya Andersen—who is now suing the RIAA for malicious prosecution.

A loss at trial would be even more catastrophic for the RIAA. It would give other defense attorneys a winning template while exposing the weaknesses of the RIAA's arguments. It would also prove costly from a financial standpoint, as the RIAA would have to foot the legal expenses for both itself and the defendant. Most of all, it would set an unwelcomed precedent: over 20,000 lawsuits filed and the RIAA loses the first one to go to a jury.
A subtle change in strategy

There is one more subtle shift in strategy on the part of the music industry. The RIAA appears to have dropped the "making available" argument in its most recent filings. It is absent from the RIAA's motion for default judgment in Interscope v. Rodriguez and, in Virgin v. Thomas, the labels are accusing the defendant of "distributing" music over KaZaA. If they can make the distribution charges stick, it will be problematic for the defendants. But given that the only cases of "distribution" ever witnessed occurred when only the RIAA's investigators were watching, it is by no means a slam dunk.

If the judge denies the RIAA's motion, there is a September 24 settlement conference scheduled. Should that fail to bear fruit—and there is no reason to think that it will—Virgin Records, et al v. Jammie Thomas is scheduled to go to trial on October 1.

NORTH EAST, Md. -- A Maryland mother was arraigned on drug and child abuse charges after police said she threw her 6-month-old child across a room at a police officer.

According to court documents, the incident happened in late July at a home on Inverness Drive in Cecil County.

According to court documents, state troopers were called to a trailer on Inverness Drive to check on the well-being of Evelyn Doninger, 23, of North East, and her two small children.


Officers said that they smelled a strong odor of marijuana coming from inside the home, so they told Doninger they would be coming in. The court documents said that Doninger told police they had no right to enter her home.

Police said that they noticed a hand -rolled cigarette and a bag with what they believed was marijuana in it, as well as various drug paraphernalia. They also said they found two men inside the home and two children -- a 2-year-old and a 6-month-old.

Police said they told Doninger she was being arrested. The documents said she became "incredibly irate," stood up from a chair and threw the 6-month-old at least 5 feet at one of the troopers.

The child struck the trooper's chest and he caught the baby just before it hit the floor, according to court documents. Doninger then shoved the trooper, striking both him and the baby.

Neighbors who spoke with WBAL TV 11 News said that the allegations are shocking, but most turned away when 11 News asked them about it for fear of retaliation from drug dealers who the neighbors said have a strong presence in the area, according to 11 News reporter Lowell Melser.

A woman who neighbors said was Doninger's mother -- but would not identify herself to Melser -- said that there was some validity to the story, but would not give details.

Police said that the 6-month-old baby is doing fine.

Doninger has since been released from jail. She is facing eight different child abuse and drug charges.

A trial date has not been set.

What is the bill about:
-starting with 2009 all firearms sold in California will be required to be fitted with a firing pin that imprints the serial number of the gun on the ammo casing.

Koreas seek formal end to Korean War