The Legal Infrastructure of Business

North Face Sues Teenaged South Butt Creator

Someone posted on this story during the Fall '09 class.  Just heard the news on the radio that North Face is now suing:

 

"An entrepreneurial college student created what he claims is a parody of the popular The North Face brand called The South Butt.

Now he's getting an extracurricular education in corporate hardball. The huge apparel maker whose identity the young man mocks has sued the 18-year old for what it claims is trademark infringement.

Jimmy Winkelmann, a University of Missouri at Columbia freshman, created his brand which clearly borrows heavily from the apparel giant as a send up of all the people who mindlessly wear North Face gear because everyone else they know wears it.

So South Butt has a logo that resembles North Face's, except flipped upside down. It sells tee shirts and a jacket. And it has twisted the North Face marketing slogan of "Never stop exploring" into "Never stop relaxing."

Winkelmann reported on the lawsuit on his website Monday:

Hey everybody -

News came Friday afternoon that The North Face has decided to take us to court! Now, more than ever, we need your support as we prepare for the upcoming events. We're stocked up and ready for the Holiday rush that is about to take place because of this news -- please get your Christmas orders in ASAP !

Because of this, we've launched a new Facebook app that allows you see the difference between a face and a butt. It's a ton of fun and can be a bit addicting! Here is the link: The South Butt Challenge on Facebook.

We're up against a $7 billion dollar powerhouse (The North Face, owned by VF Corporation), but we feel confident with our idea and our friends, family, and supporters!

Winkelmann, who clearly has an impish sense of humor, also has a press release with a line you don't usually see in a company's press release:

Sample Media Kits, Including Product Samples, Available Upon E-Mail Request to albertswatkins@kwmwlaw.com [Subject to Jimmy's Mom's Availability to Package Same]

The Associated Press reports that North Face had no comment and its law firm didn't return phone calls.

While Winkelmann is drawing some expressions of support on his website, not all the commenters on his site side with him.

A commenter named KEH, wrote (with misspellings):

sorry, I am usually for the little guy and have found some of these lawsuites stupid. Heard about this on the radio.

I have to agree with The North Face.. you are leveraging their creative work and image with some humor. But you are not a parody, you are a competator in thier industry."

 

Source: http://www.npr.org/blogs/thetwo-way/2009/12/north_face_sues_teenaged_south.html

Bear Stearns Info Uncovered

I just came across this article, and thought I'd share it because it seemed like we had discussed the details of the Bear Stearns acquisition so little in our last class.  Perhaps more details on this and other pre-bailout dealings will being surfacing in coming months.  In the meantime, though, I didn't want this one to escape our blog.  I've really enjoyed this class, and I hope to be in touch with classmates as we move forward.  All the best, everybody!

Steve Sigurdson

Judicial Watch Uncovers Documents From Treasury Related to Government-Brokered Acquisition of Bear Stearns by JP Morgan

Documents Include "Confidential" Term Sheets Describing the March 2008 Deal; JP Morgan Described Bear Stearns "Nearly Worthless" Hours Before Deal Struck

WASHINGTON, DC -- (MARKET WIRE) -- Sep 17, 2009 -- Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it has uncovered documents from the Treasury Department related to the March 2008 government-brokered acquisition of Wall Street firm Bear Stearns by JP Morgan Chase and Co. The documents include "confidential" term sheets describing the deal, released to the public for the first time, along with behind-the-scenes email correspondence between Treasury officials indicating that JP Morgan officials believed Bear Stearns to be "nearly worthless" just hours before the acquisition deal was announced. The documents were obtained by Judicial Watch in response to a December 8, 2008, Freedom of Information Act (FOIA) request.

On Sunday, March 16, 2008, JP Morgan announced that it had acquired troubled Wall Street firm Bear Stearns for a price of $2 per share, a fraction of the firm's $30 market price on Friday, March 14. The Federal Reserve Bank of New York (NY FRB) supported the deal with $30 billion in funding at the direction of then-Treasury Secretary Henry "Hank" Paulson.

In addition to the "confidential" term sheets uncovered by Judicial Watch, the documents also include email correspondence indicating that the acquisition of Bear Stearns was very much in doubt just hours before the deal was announced to the press on Sunday night, March 16. According to an email sent Sunday morning by NY FRB official Michael Holscher to then-head of the NY FRB and current Treasury Secretary Timothy Geithner, titled "JPM Findings":

  JPM [JP Morgan] has discovered a large (50bn) structured mortgage position funded by 

BSC [Bear Stearns Capital], as well as other risk positions that are making them balk 

on the deal. I have asked for a report on their findings to assess the exposures. They 

also indicated that BSC's risk positions are exactly what JPM has avoided in recent 

years. They estimate the book value of the firm to be nearly worthless... and that 

risks on other unknowns are to the downside. They inquired about options that the 

federal government may have to bail out/ purchase BSC, we indicated that options are 

extremely limited.

Ultimately JP Morgan received the guarantees it needed from the Treasury Department to consummate the deal to obtain the "worthless" Bear Stearns later that evening. These FOIA documents were initially withheld from Judicial Watch in March and were only released after an administrative appeal to the Treasury Department. Nonetheless, Treasury has redacted information from many of these new documents and withheld many documents in their entirety. Separately, Judicial Watch is pursuing a FOIA lawsuit for Vern McKinley, who is seeking documents on the government's contention that a Bear Sterns' collapse would have caused a "contagion" in the financial system. This lawsuit was highlighted in a September 13 editorial in The Wall Street Journal.

"The public has a right to know the full truth about the federal government's unprecedented intervention into the financial markets, and that is what we are delivering through our open records requests. These Treasury documents, despite the improper redactions, provide a fascinating backdrop to the Bear Stearns deal, and what a scam it was. The federal government's $30 billion Bear Stearns bailout was designed to help stave off chaos in the financial markets. And this bailout did nothing to stave off the economic crisis. Since Bear Stearns, the federal government has committed trillions of taxpayer dollars to prop up other 'worthless' financial institutions with no end in sight," stated Judicial Watch President Tom Fitton.

Visit www.JudicialWatch.org to read the Treasury Department documents uncovered by Judicial Watch.