Judge Approves Settlement In Missing Zeros Case, But Fight Goes On
NEW YORK (AP) _ The losing side vowed to fight on Thursday after a federal bankruptcy judge approved an $11 million settlement in a case involving three zeros accidentally dropped from some financial documents.
″We have not given up the ship, so to speak,″ said Sandra Mayerson, a lawyer representing a major creditor in the Chapter 11 proceedings of United States Lines, a moribund shipping company, and its parent McLean Industries Inc.
Prudential Insurance Co. of America agreed this week to pay about $11 million to United States Lines to settle legal claims stemming from a clerical error in which a mortgage lien Prudential held on eight ships, worth $92,885,000, was recorded as worth $92,885.
Prudential agreed to pay the money to keep United States Lines and other creditors from challenging the full amount of the lien.
Ms. Mayerson said her client, General Electric Capital Corp., which shared a second mortgage on the ships, would press its challenge in Admiralty Court and might even appeal the ruling Thursday by U.S. Bankruptcy Judge Howard Buschman III.
If General Electric Capital can convince a judge that Prudential’s lien is really worth only $92,885, it will get a bigger portion of the more than $60 million in net proceeds raised by the sale of the eight ships.
The oddity of a clerical error costing Prudential more than $11 million attracted widespread attention to the case. But it was not a major case in the legal annals, said Sheldon Hirshon, a lawyer for another creditor, Sea-going Benefit Plans, which went along with the settlement.
″This is not Brown vs. Board of Education,″ Hirshon said, referring to the landmark 1954 school desegregation case.