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Jury Close To Verdict In Civil Case Regarding Battenberg

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On: Mon, Jan 17, 2011 at 3:20PM | By: Sherry Christiansen

Jury Close To Verdict In Civil Case Regarding Battenberg

In the recent trial of Delphi CEO J.T. Battenberg III, the 10-person jury sat through 11 weeks of a court proceedings based on 1 million pages of court documents that were filed and entered into evidence. On the average, a person can read around 100 pages per hour, depending on the content. This would mean that in order for the jury to read through all of those documents, they would have had to be reading around the clock, with no breaks, for up to 416 days straight. Despite that, they were still able to reach a verdict on some of the more serious charges.

The big news: Battenberg was found to have not committed fraud as it pertained to the $237 million payment that Delphi made to its former parent company—GM—back in 2000.

These fraud claims dealt with a SEC (Securities and Exchange Commission) disclosure and one violation of bookkeeping rules. Basically, Battenberg was accused of inflating Delphi’s books by calling that big $237 payment something it shouldn’t have been called. Those were the really bad charges. However, the jury did find him “responsible” for three claims of improper bookkeeping and fibbing to the accountants.

Still it was the lack of fraud charges that meant the most to Battenberg. “The finding of no fraud is extremely gratifying,” he told The Associated Press. With those fraud charges behind him, Battenberg can begin his long road back to regaining his reputation in the business world.

In the same trial, ex-Delphi chief accountant Paul Free got the good news that he wasn’t being called a fraud either in this same deal. However, he is being held “responsible” for two bad claims relating to the sale of invent to Bank One. In that scheme, the SEC accused Free of selling $200 million worth of product to puff up the earnings. Then that product “magically” returned to Delphi without ever changing hands.

Although they didn’t get everything they were looking for, the SEC is still satisfied. “We are pleased with these verdicts that send a clear message that filing false public statements and misleading investors will not be tolerated,” said Gregory Miller, SEC assistant chief litigation lawyer.

After all of this trial, testifying, and deliberating, Battenberg and Free are now facing a fine that will be handed down by a federal judge. Interestingly enough, it was Battenberg and Free who wanted the trial in the first place even after 11 of their co-workers settled with the government. File this one under “white collar crimes, bookkeeping division.”


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