[absalom01]

Here's the AP story, from Yahoo. Also, see my post above. As you suggest, this is being "spun" by the media in the most negative way possible. Per the AP on Yahoo!:

Jury Awards $65M to Coin Company

Wed Jul 31, 9:16 PM ET

By ERICA WERNER, Associated Press Writer

LOS ANGELES (AP) - A jury in a fraud lawsuit on Wednesday awarded a businessman $65 million in punitive damages against gubernatorial candidate Bill Simon's investment firm.

A day earlier, the Superior Court jury found William E. Simon & Sons liable for fraud and assessed $22.2 million in compensatory damages.

Simon, a Republican facing Democratic Gov. Gray Davis ( news - web sites) in the November election, started the investment firm with his brother and his father, a former U.S. Treasury secretary.

The lawsuit was filed by Paul E. Hindelang, who co-founded and owns 95 percent of Pacific Coin Management. The suit alleged that Simon & Sons and other firms that invested heavily in Pacific Coin hatched a secret plan to take Pacific Coin public and in the process destroyed the company.

While offering assurances they would stick to Hindelang's slow-growth plan, the investors were planning aggressive acquisitions with the goal of pulling off a highly profitable public offering, the suit said.

Simon, who was not named in the suit and is on leave from his post as co-chairman of Simon & Sons, said Wednesday in a statement the decision "is fundamentally flawed."

"I expect the judge to set aside this judgment or it will be overturned on appeal," he said.

Simon & Sons and another investor acquired a controlling 60 percent interest in Pacific Coin in a deal consummated in 1998. The plan for an initial public offering failed and debt-ridden Pacific Coin was taken over by a bank in 2000.

In 1981, Hindelang pleaded guilty to federal drug smuggling charges and served about 30 months in prison. The Wall Street Journal reported on Hindelang's past in 1998, and Hindelang claimed investors used that article as a pretext for Pacific Coin to wrongfully remove him as chief executive.

Investors filed a federal lawsuit, later dismissed, that accused Hindelang of fraudulently concealing his past. Hindelang then sued the investors in Superior Court, and the investors filed a countersuit with the concealment allegation. The jury rejected the investors' claims.

[goldstategop]

Yeah expect the GrayDown pressmeisters to make the most of it.

[NormsRevenge]

Here's the Sac Bee's blurb

Multimillion-dollar verdict against Simon firm, others in suit

By ERICA WERNER Associated Press Writer
Published 4:25 p.m. PDT Wednesday, July 31, 2002

LOS ANGELES - The jury in an investment fraud lawsuit on Wednesday awarded a businessman $65 million in punitive damages against William E. Simon & Sons and $10 million against another firm a day after awarding $22.2 million in compensatory damages.

William E. Simon & Sons is the investment firm started by California GOP gubernatorial candidate Bill Simon, his brother and his father, a former U.S. Treasury secretary. Bill Simon will face Democratic Gov. Gray Davis in the November election.

The award went to Pacific Coin Management, which is 95 percent owned by businessman Paul Edward Hindelang, co-founder of Pacific Coin, a coin telephone company that Simon & Sons once invested in.

On Tuesday, the Los Angeles County Superior Court jury found William E. Simon & Sons LLC, B-R Investors Inc. and other entities liable for fraud and awarded the plaintiff $22.2 million in compensatory damages.

Bill Simon, who was not personally named in the suit and is on a leave from his post as co-chairman of Simon & Sons for his gubernatorial run, reacted to the verdict during a campaign stop in Fresno.

"The decision made today is fundamentally flawed and I expect the judge to set aside this judgment or it will be overturned on appeal," he said in a statement.

The lawsuit claimed the investors hatched a secret plan to take Pacific Coin public and in the process destroyed the company.

It claimed they misled Hindelang about their intentions when they invested in the company, while offering him assurances that they would stick to his slow-growth business plan.

Instead they were planning all along an aggressive strategy of acquisitions with an ultimate goal of pulling off a highly profitable public offering, the suit claimed.

"Defendants steered Pacific Coin from one disastrous transaction to another solely for defendants' benefit," the suit said.

The jury found that Coinable Simon, the investment vehicle Simon & Sons used in the transaction and B-R Telephony Partners, the investment vehicle of B-R Partners, breached their fiduciary duty.

Simon & Sons and B-R investors acquired a controlling 60 percent interest in Pacific Coin in a deal that closed in February 1998. The plan for an initial public offering failed and the indebted Pacific Coin was taken over by a bank in December 2000.

In 1981, Hindelang pleaded guilty to federal drug smuggling charges and served about 30 months in prison.

The Wall Street Journal reported on Hindelang's troubled past in December 1998, including that he had just agreed to forfeit $50 million in drug-trafficking proceeds to the federal government.

Hindelang claimed the investors used that article as a pretext to cause Pacific Coin to wrongfully remove him as chief executive officer.

The legal battle began when the investors filed a federal lawsuit accusing Hindelang of fraudulantly concealing his past. That suit was thrown out.

Hindelang then sued the investors in Superior Court, and the investors filed a countersuit with the concealment allegation. Both suits were combined. The jury rejected the investors' claims.

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