Tag Archives: pension

Florida pension fund sues Elon Musk over Twitter deal

Elon Musk’s $44 billion buyout of Twitter is facing its first legal challenge. A Florida pension fund is suing Musk and Twitter, arguing that the deal can’t legally close until 2025 due to the billionaire’s stake in the platform. The proposed class-action lawsuit — filed today by the Orlando Police Pension Fund in the Delaware Chancery court— also declares that Twitter’s board of directors breached its fiduciary duties by allowing the deal to go through. In addition to Musk and Twitter, the lawsuit also named former Twitter CEO Jack Dorsey, current Twitter CEO Parag Agrawal and the company’s board as defendants.

In a message to Engadget, Tulane Law School’s Professor Ann M. Lipton says the lawsuit raises “some very novel issues” under Delaware corporate law. Under a law known as Section 203, shareholders who own more than 15 percent of the company can’t enter a merger without two-thirds of the remaining shares granting approval. Without this approval, the merger can’t be finalized for another three years.

The fund’s lawyers state that Musk initially owned roughly 10 percent of Twitter’s shares, which would seemingly not make Section 203 applicable. But, the fund argues, Musk formed a pact with Morgan Stanley (which owns 8.8 percent of shares) and former CEO Jack Dorsey (who has 2.4 percent) to advance the deal. The combined stake of these parties allegedly makes Musk and his allies in the takeover deal an “interested shareholder” under Section 203 — which, if the court agrees with the underlying reasoning presented in the case, means the merger must either be delayed or get approval shareholders representing at least two-thirds of the company’s ownership. 

“Section 203 is not often litigated, and so the issue of whether Musk’s relationship with these parties actually counts for statutory purposes is an unsettled question and it will be interesting to watch how it unfolds,” wrote Lipton.

More details of Musk’s highly complex $44 billion buyout of Twitter have been made public since the social media platform accepted the billionaire’s offer last month. The New York Times reported that Musk promised investors returns of nearly five to ten times their investments if the deal went through. Parts of the deal are being scrutinized, including its reliance on foreign investors and whether Musk bought shares in the company specifically to influence its leadership. But antitrust experts say the merger is unlikely to be blocked by the FTC. The agency will decide in the next month whether to quickly approve the merger or launch a lengthier investigation.

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Cuomo files for retirement to receive state’s lifetime pension, report says

Gov. Andrew Cuomo, the New York Democrat who said he will resign from his position amid numerous sexual harassment allegations, has filed retirement paperwork that will allow him to receive $50,000 a year for the rest of his life, a report said.

The New York Post, citing state laws, reported that “neither resignation or impeachment for alleged misconduct bars resignation or impeachment for alleged misconduct bars eligibility from obtaining a pension for state service.”

NY LAWMAKERS TO CONTINUE CUOMO INVESTIGATION, REVERSING COURSE AFTER BACKLASH

A spokesperson from the state comptroller’s office confirmed that retirement application for the paper. Cuomo’s office did not immediately respond to an after-hours email from Fox News.

Cuomo’s decision came a week after New York’s attorney general released the results of an investigation that found Cuomo sexually harassed at least 11 women.

TUCKER CARLSON: HERE ARE THE OBVIOUS QUESTIONS NO ONE IS ASKING ABOUT ANDREW CUOMO

Investigators said he subjected women to unwanted kisses; groped their breasts or buttocks or otherwise touched them inappropriately; made insinuating remarks about their looks and their sex lives; and created a work environment “rife with fear and intimidation.”

Cuomo still faces the possibility of criminal charges, with a number of prosecutors around the state continuing to investigate him. At least one of his accusers has filed a criminal complaint.

Tim Hoefer, president and CEO of the Empire Center for Public Policy, criticized Cuomo’s retirement application.

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“So if you’re wondering, without a felony conviction and several other steps, Cuomo would be eligible for his full pension, at taxpayer expense, for the rest of his life,” he said.

The Associated Press contributed to this report

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Macron looks at pension reform ahead of election

French President Emmanuel Macron.

Chesnot | Getty Images News | Getty Images

LONDON — A thorny issue for many years, France’s pension system is back in the spotlight as President Emmanuel Macron prepares his final grand act before new elections in April.

Macron had plans to change France’s pension system, where workers can retire at 62, before the coronavirus pandemic hit. However, he was forced to put his plans on hold to deal with the health and subsequent economic crises.

With less than a year to go before French voters head to the polls, Macron is considering reviving his plans and make good on his 2017 promise to reform the pension system, albeit in a different format.

Speaking in June, Macron said: “I do not think that the reform as it was originally envisaged can go ahead as such,” according to Reuters.

In its pre-Covid format, the pension reform included raising the retirement age from 62 to 64 and creating a universal points-based system that would replace the dozens of sector-specific regimes that are currently in place, which mean that some workers can retire earlier than others.

The question is whether he chooses to revive his efforts to reform the pension system. Doing so would be quite a gamble.

Jessica Hinds

Economist at Capital Economics

It is yet unclear how and when Macron will choose to change the pension system. However, he met with leaders of trade unions on Tuesday to discuss the “demographic challenge,” according to statement issued by his team, and is expected to present his ideas in the coming days.

The main trade unions in France are reportedly against changing the pensions system in the coming months.

By pushing his pension reform plan, Macron will try “to overcome the inertia and appear as someone who can solve important structural problems, appease an important part of his electorate on the right, in particular retirees, (and) to undermine a potential rival from (the centre-right party) Les Republicains and secure re-election,” Tomasz Michalski, an economics professor at H.E.C. Paris business school, told CNBC via email.

Current opinion polls project Macron’s re-election in 2022, after facing off with the far-right Marine Le Pen in the second round of the presidential election. However, recent regional elections, where abstentions were at record highs, showed strong support for the center-right party Les Republicains.

This party could now challenge for some of the votes that Macron would usually receive, at least in the first round of the election.

Jessica Hinds, an economist at Capital Economics, told CNBC that changing the pension system could be “quite a gamble” for Macron.

“It would allow Macron to claim he had followed through on his 2017 promise and also could allow him to steal a march on rivals from the centre-right, but the reform was also politically unpopular before the pandemic and is even more so now with a recent survey showing that 60% of voters opposed such a move before next year’s election,” she said via email.

Why it matters?

The debate over pension reform is particularly tricky.

As Michalski explains, it pits different groups against others, namely blue-collar, low-paid service workers or public sector workers on one side, versus private sector, white-collar workers and retirees.

The issue has sparked strikes across the country, including in early 2020.

“I think we have to push back [the] retirement age. We cannot have a situation where our German, Dutch, Finnish neighbors with whom we borrowed together through the European Loan Program, which we’ve just put in place, they’re retiring [at] 67, and we can’t continue to have people leaving at 62,” Ross McInnes, chairman of the defense and aerospace firm Safran, told CNBC’s Charlotte Reed on Sunday.

“The baby boomers have been indebting, putting debt which will have to be paid by younger generations. That is unfair, and it’s economically inefficient, and it must be stopped. The only way we can do that is push out the retirement age to 64 or 65, and that will help us balance the books,” he added.

One way or another, and sooner or later, changing the pension system will be inevitable, according to experts.

“Ultimately, though, demographic pressures mean that France’s costly pensions system will need reforming sooner or later. So even if Macron holds off this time, the issue will not go away,” Hinds said.

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General Motors settles with California for $5.75M in a win for state pension fund

SACRAMENTO, Calif. — General Motors Co. has agreed to a $5.75 million settlement with California regarding false statements the company made to investors about problems with its deadly ignition switches, state officials announced Friday.

The faulty ignition switches led to at least 124 fatalities and 274 injuries nationwide. The defect also resulted in the recall of more than nine million vehicles in 2014 — one of the biggest recalls in the nation’s history — from the largest U.S. automaker because the switches sometimes caused the sudden termination of electrical systems, including power steering and power brakes.

GENERAL MOTORS TO GO ALL-ELECTRIC BY 2035

In 2015, GM agreed to pay a $900 million settlement to end a U.S. Department of Justice criminal probe, as well as $1 million in 2017 to the U.S. Securities and Exchange Commission for an accounting case. Later that year, the automaker settled with dozens of states for $120 million.

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GM did not admit any wrongdoing as part of the 2021 agreement with California, and the company’s media representatives did not immediately respond to a request for comment Friday.

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California’s settlement came about because the state’s largest pension system, the California Public Employees’ Retirement System, lost millions of dollars in GM stock. The company knew about the faulty switches in 2005 but failed to report it to federal authorities until 2014, officials said and hid the problems from investors.

Automakers must notify the National Highway and Traffic Safety Administration within five days of finding out about a safety defect.

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“General Motors cheated California twice –- first by concealing a fatal flaw in its vehicles, then by concealing the facts about the flaw in its financial disclosures, which affected the retirement investments of public servants across California,” Attorney General Xavier Becerra said in a statement. “This settlement finally holds GM to account.”

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