June 11 (Reuters) – Directors of Allergan Inc must face a lawsuit over $600 million in fines the company paid for misbranding its Botox treatment to smooth out wrinkles, a Delaware judge ruled, in a decision that could affect securities litigation in that state.

The opinion by Chancery Court Judge Travis Laster could make it easier for shareholders to bring lawsuits on behalf of companies in Delaware, a state traditionally seen as friendly for corporate defendants.

Allergan declined to comment.

The lawsuit stems from a $600 million settlement Allergan reached with the U.S. Department of Justice in 2010, which followed a three-year investigation by several government agencies of the marketing of Botox for unapproved uses.

Following the settlement, the Louisiana Municipal Police Employees’ Retirement System and U.F.C.W. Local 1776 pension funds brought derivative lawsuits in Delaware’s Court of Chancery and several similar lawsuits were filed in California federal court.

Derivative lawsuits allow shareholders essentially to step into the shoes of the company and sue directors for harm. Any recovery from individual directors or their insurers would go to the company, rather than to shareholders.

The California lawsuit was dismissed earlier this year and the directors argued that this meant the Delaware case should also be dismissed.

June 7 (Reuters) – A $2.03 billion judgment in a lawsuit brought by shareholders of Southern Copper Corp should be overturned because a key witness from deal adviser Goldman Sachs Group Inc was excluded from the trial, lawyers challenging the ruling argued in Delaware’s Supreme Court on Thursday.

The judgment was awarded by Delaware Chancery Court Judge Leo Strine in October 2011 in a case brought by investors who accused Southern Copper of overpaying in the 2005 takeover of privately held Minera Mexico.

Goldman advised a special committee at Southern Peru Copper Corp, the predecessor of Southern Copper, that considered the acquisition. Both Southern Copper and Minera were controlled by Grupo Mexico, and Strine found that the directors of Southern Copper were coerced into vastly overpaying for Minera, which they acquired in 2005 for $3.1 billion in stock.

The Delaware Supreme Court was also asked to overturn a $304 million fee that Strine awarded to the shareholders’ attorneys, which by some measures is one of the biggest fees awarded by a court in a large securities litigation case.

The one-hour hearing in Dover focused mostly on the judgment rather than the fee. Most of the argument centered on Strine’s refusal to adjust the schedule to allow a Goldman Sachs banker, who is no longer at the bank, to testify at the trial.

The Goldman Sachs witness was expected to explain to the court how the Southern Copper special committee valued its own stock and that of Minera Mexico.

Goldman Sachs declined to comment.

, June 7 (Reuters) – Tribune Co’s long bankruptcy entered what is expected to be the final stage on Thursday, although the media company still faces months of regulatory clearances to transfer broadcast licenses to new owners.

The owner of 23 television stations and publisher of the Chicago Tribune and Los Angeles Times asked a Delaware bankruptcy court to approve a reorganization plan to pay off creditors. The company failed a year ago in an attempt to end its Chapter 11 case because of creditor disputes, but this time success appears much more likely.

“Here we find ourselves back at the river’s edge,” Tribune lawyer James Bendernagel, of law firm Sidley Austin, told the court as the confirmation hearing began. “This time the river’s quite a bit narrower.”

Tribune Co, which also owns a cable network and several other large newspapers, was acquired in 2007 by financier Sam Zell in a $13 billion leveraged buyout.

The buyout, which Zell has called the “deal from hell,” coincided with a U.S. recession and a major downturn in newspaper advertising and readership as consumers flocked to the Internet. Less than a year after the deal closed, the company filed for bankruptcy, and noteholders have blamed Zell and the buyout for their losses.

The bankruptcy plan would turn over ownership to holders of the company’s loans, a group that is led by JPMorgan Chase & Co and hedge funds Oaktree Capital Management LP and Angelo, Gordon & Co. They will appoint the company’s seven-member board.

On a conference call with the legal teams on Wednesday, U.S. Bankruptcy Judge Kevin Carey discussed when the reorganization would become effective and procedures for an appeal — giving the impression that confirmation was likely.

, May 31 (Reuters) – Martin Marietta Materials Inc lost its appeal to overturn a court order that halted its $4.5 billion hostile bid and proxy contest for rival Vulcan Materials Inc.

Delaware’s Supreme Court on Thursday affirmed a ruling by the state’s Court of Chancery, which prevented Martin Marietta from seeking to elect four nominees to Vulcan’s board at Friday’s meeting of Vulcan shareholders.

The lower court halted Martin Marietta’s bid and proxy contest for four months as punishment after Martin Marietta breached a confidentiality agreement the two companies signed in 2010 when they engaged in friendly merger talks.

A Martin Marietta spokeswoman did not immediately respond to a request for a comment on whether the gravel and cement maker intended to pursue its bid for its larger rival.

Garik Shmois, an investment analyst who follows the companies for Longbow Research, told Reuters on Tuesday that he doubted Martin Marietta would continue to pursue its bid once the court-imposed four-month wait had expired.

The proxy contest was central to Martin Marietta’s bid strategy; it said it wanted the support of Vulcan’s board for its bid.

Vulcan has a staggered board, meaning it takes two annual proxy contests to win a majority of seats.

WILMINGTON, Del, May 30 (Reuters) – Attorneys for the state of Delaware struggled at a court hearing on Wednesday to keep alive a closely watched lawsuit against MERS, the electronic mortgage registry accused of abuses in housing foreclosures.

The state’s lawsuit, announced at press conference in October, is seen as a test case for addressing concerns that homes were being seized from defaulted borrowers without following proper procedures.

The Mortgage Electronic Registration Systems Inc, known as MERS, is an electronic-lien registry created by the mortgage banking industry as a way to streamline and speed up the mortgage recording and transfer process.

Delaware attorneys are seeking an injunction to force MERS to correct problems with its database. MERS, meanwhile, asked the chief judge of the state’s Court of Chancery to dismiss the lawsuit, arguing that the allegations did not violate Delaware’s Deceptive Trade Practices Act.

And while Judge Leo Strine was clearly sympathetic to the problems faced by delinquent borrowers who had no idea with whom to negotiate when trying to save their homes, he repeatedly questioned a state lawyer about why they had decided to sue MERS and under the deceptive trade practices law.

“The system has errors. How do I get to deceptive?” Strine asked Deputy Attorney General Jeremy Eicher.

Strine also told Eicher twice not to “make stuff up” as Eicher seemed to veer from the original arguments made in the state’s briefs.

WILMINGTON, Delaware (Reuters) – Martin Marietta Materials Inc (MLM.N: Quote, Profile, Research, Stock Buzz) may have little chance for success when it goes to Delaware’s Supreme Court on Thursday for what could be a last-gasp attempt to revive its $4.5 billion hostile bid for Vulcan Materials Co (VMC.N: Quote, Profile, Research, Stock Buzz).

Martin Marietta, which wants to complete the deal to become the world’s biggest producer of sand, gravel and other construction materials, hopes to reverse a ruling made earlier this month by Delaware’s Court of Chancery. In that decision, Judge Leo Strine blocked the company from pursuing the hostile bid and a proxy contest for four months as punishment for violating confidentiality agreements with Vulcan.

“I think that there is very little chance Martin Marietta will succeed on appeal,” said corporate law specialist David Robbins, a partner with law firm Bingham McCutchen in Los Angeles, who is not involved in the case.

Vulcan said the Chancery Court had made the right decision.

A Martin Marietta spokesman declined to comment on Wednesday.

Martin Marietta also needs the state’s high court to delay the Vulcan shareholders meeting, which is scheduled for Friday, so it can solicit proxies for its four nominees to Vulcan’s 10-member board.

The proxy contest was central to Martin Marietta’s hostile takeover strategy. It wanted to elect its allies to Vulcan’s board so they could press for Martin Marietta’s offer to be accepted.

By Tom Hals and Dan Levine

(Reuters) – Facebook Inc’s bungled initial public offering has gone from one of the most highly anticipated stock offerings to a hot legal opportunity for lawyers on both sides of shareholder litigation.

Court battles over the fizzled IPO could run for years, as the social networking company, the banks that took it public and the Nasdaq OMX Group Inc face claims that they short-changed investors.

Besides fighting off claims by Facebook shareholders, the defendants will also need lawyers to respond to inquiries from government investigators looking into how the IPO was handled.

All of this creates a growing legal headache that could pit defendant versus defendant in assigning blame for the IPO fiasco, said Jacob Frenkel, a partner at law firm Shulman Rogers Gandal Pordy & Ecker and a former enforcement lawyer with the U.S. Securities and Exchange Commission.

“I think we should expect a lot of finger pointing,” Frenkel said. “That’s the exact reason that this is going to be such an opportunity for law firms.”

Facebook’s IPO raised $16 billion and briefly put a $100 billion stock market value on the company. But the stock has slumped about 16 percent since the glitch-filled offering on May 18, and the legal problems are mounting.

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

By George Hay

LONDON, May 24 (Reuters Breakingviews) – Andrew Bailey has a point. The UK’s chief bank regulator-in-waiting has taken aim at one of the peculiarities of Britain’s retail banking system: customers generally do not pay for services like current accounts, using cash machines and writing cheques. As Bailey notes, this perpetuates the UK’s banking oligopoly. It is also fiendishly difficult to unwind.

Large UK banks spend billions of pounds a year on their domestic payment systems. When interest rates were well over 10 percent in the 1980s, lenders financed this by paying very little for deposits and deploying the surplus cash. As rates have fallen, however, this income has dried up. Instead, banks now impose eye-watering charges on unauthorised overdrafts. They have also focused on plying customers with duff products like Payment Protection Insurance – now the source of huge compensation claims.

This system is regressive and opaque. The logical solution would be to follow the example of many banks in continental Europe, which tend to levy a monthly charge for current accounts. But such a seemingly regressive move would cause a huge political stink that an already-unpopular industry can ill afford. Besides, the first bank to act would risk losing angry customers to its competitors. Any co-ordinated action would look like collusion.

If regulators imposed some minimum charge they would face a public and political outcry. But if they cap the overdraft charges that banks can levy, they would achieve two goals. First, they would look tough. Second, lenders would be forced to find other ways to fund their payments systems, giving them an incentive to charge.

Banks could then start “nudging” their customers. The right to not pay for basic banking services could be preserved. But banks could gradually introduce some fees, while simultaneously offering customers the opportunity to avoid those fees in return for a flat charge.