Reviewing 5 of November’s top stories

The presidential election finally comes to an end, HP takes a financial hit and three more continuing cases in the news

Presidential Pick

One of the biggest stories of November—and of the last several years—was the 2012 presidential election. On Nov. 6, Americans re-elected President Barack Obama to another four-year term by a margin of 332 electoral votes over Republican challenger Mitt Romney’s 206.

Obama’s continued residency in the Oval Office means that many of the legislative reforms of his first term will remain in effect, notably the Patient Protection and Affordable Care Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. Less certain is the outcome of the current fiscal cliff debate over the automatic package of tax increases and spending cuts scheduled to take effect Jan. 1, which many experts predict would return the country to a recession.

On Thursday, administration officials proposed a plan for avoiding the crisis. But Republicans promptly rejected the deal, arguing that it did not include any spending cuts. The Obama administration, however, maintains that there will be no agreement without increased taxes for high-income Americans. In a sign of the continuing deadlock, Republican Speaker of the House John Boehner  told journalists that “no substantive progress has been made between the White House and the House,” in the past two weeks.

Meningitis Mishap

Lawsuits continue to pile up against a Massachusetts pharmacy that allegedly caused a deadly nationwide outbreak by selling steroids contaminated with fungal meningitis. The New England Compounding Center allegedly manufactured the defective doses, which sickened almost 500 people and killed 36.

As part of its investigation into the outbreak, the House of Representatives Energy and Commerce Committee subpoenaed NECC Chief Pharmacist Barry Cadden earlier this month. At the subsequent Congressional hearing, Cadden invoked his Fifth Amendment rights and refused to testify. His attorneys, however, later told a federal judge that Cadden and his wife, NECC co-owner Lisa Cadden, haven’t compounded drugs at the pharmacy for years.

Of course, those claims haven’t prevented victims of the outbreak from filing lawsuits against NECC. And their claims of negligence may have legs, considering that investigators in 2006 found the pharmacy’s contamination control procedures to be inadequate.

Twinkies Terminated?

Twinkies—the snack food that we all thought would never die—had their survival threatened this month by a dispute between Hostess Brands Inc. and one of its labor unions. The trouble began when the bakery filed for Chapter 11 protection in Jan. 2011, just two years after emerging from a previous bankruptcy.

As part of the bankruptcy proceedings, Hostess received court approval to reject some union contracts, adjust certain retiree benefits and impose a wage-cutting contract with union employees in an effort to avoid collapse. Members of the Bakery, Confectionary, Tobacco and Grain Millers International Union went on strike in response to the contract, which sliced wages by 8 percent and reportedly cut benefits by 27 to 32 percent.

When the striking employees failed to return to work by Nov. 15, Hostess announced that it would liquidate. But don’t despair Twinkie lovers: Hostess said this week that 110 buyers have expressed interested in purchasing its brands.

Abysmal Acquisition

In an epic case of a deal gone bad, Hewlett-Packard Co. (HP) announced on Nov. 20 that it would take an $8.8 billion non-cash charge related to its 2011 acquisition of software company Autonomy. HP bought the company for $11.1 billion, but subsequently learned that Autonomy’s management team allegedly “used accounting improprieties, misrepresentations and disclosure failures to inflate the underlying financial metrics of the company” before the acquisition, according to a company statement.

Autonomy’s former CEO Mike Lynch quickly denied the claims, saying through a spokeswoman that “HP’s due diligence review was intensive” and that HP management was involved in the running of Autonomy.

Whoever is to blame, HP’s stock fell precipitously on news of the large loss. Unsurprisingly, an unhappy HP investor has filed suit against the company, claiming that it knew that Autonomy’s financial statements were unreliable before the deal went through. The man is seeking class action status for the suit.

Spill Settlement

It’s been more than two and a half years since the Deepwater Horizon oil rig exploded in the Gulf of Mexico, killing 11 workers, injuring 17 others and pouring 4.9 million barrels of crude oil into the Gulf. In March, BP Plc agreed to a $7.8 billion class action settlement involving more than 100,000 plaintiffs that suffered either economic or medical damage as a result of the spill. That settlement is pending approval.

More recently, on Nov. 15, the oil company announced that it would pay $4.5 billion and plead guilty to 14 criminal charges to settle claims brought by the Department of Justice and the Securities and Exchange Commission. The settlement is the largest criminal penalty in U.S. history, surpassing the $1.3 billion that Pfizer Inc. paid for marketing fraud in 2009.

But the saga is far from over for BP, which still faces civil claims from the government. On Wednesday, the Environmental Protection Agency announced that it had temporarily suspended the company from any new U.S. government contracts because of its “lack of business integrity as demonstrated by [its] conduct with regard to the Deepwater Horizon blowout, explosion, oil spill and response.”

The next day, the Coast Guard authorized an inspection of the Deepwater Horizon site, after a surface sheen raised concerns of additional oil leakage.

Contributing Author

Alanna Byrne

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