Brazil shifts court for Chevron spill cases

By Leila Coimbra and Jeb Blount

RIO DE JANEIRO (Reuters) - A Brazilian judge moved two $11 billion civil cases against Chevron and drilling-rig operator Transocean related to an offshore drilling accident and spills to a different court in Rio de Janeiro, a decision that removes a crusading prosecutor from the cases.

The momentum is shifting in the legal battle stemming from a rupture in November at a well that Transocean was drilling in the Frade field, which Chevron operates.

The latest development, published in a court filing on Friday, comes on the heels of another decision in favor of the companies earlier this week from a separate court, in which a judge denied a request to bar the two companies from operating in Brazil.

Eduardo Santos de Oliveira, a federal prosecutor based in the interior of Rio de Janeiro state, filed two 20 billion reais ($11 billion) lawsuits against U.S. oil company Chevron and its contractor Transocean after a November spill of 2,400 to 3,000 barrels and a related March seep in the same field.

Friday's decision to move the two civil cases does not change the content of the charges, but it removes the cases from Oliveira's turf and hands them to another team of prosecutors.

The decision did not address the criminal charges that Oliveira also brought against the companies and 17 of their employees that could carry jail sentences up to 31 years.

Oliveira told Reuters he will appeal the decision.

"I remain convinced that they should be prosecuted here close to where the crimes occurred," he said.

Judge Tiago Pereira Macaciel said in a court filing released on Friday that "the magnitude of the environmental damage exceeds the area subject to the competency of Campos ... making it a regional damage."

Chevron Corp's head of media relations, Kurt Glaubitz, said Chevron Brasil Upstream Frade Ltd, its local subsidiary, was pleased with the court's decision.

Guy Cantwell, communications chief for Transocean, said by email that the company also questioned the validity of a second civil lawsuit, saying the charges lacked technical grounds.

Chevron owns 52 percent of the Frade field, Brazil's state-led oil company Petrobras owns 30 percent and a Japanese group led by Inpex Corp and Sojitz Corp owns 18 percent.

($1 = 1.8 reais)

(Reporting by Leila Coimbra; Writing by Reese Ewing; Editing by Carol Bishopric and Tim Dobbyn)

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Judge to review moving hundreds of Madoff cases

By Grant McCool

NEW YORK (Reuters) - In the sprawling litigation to recover money related to Bernard Madoff's fraud, a federal judge said he would decide whether a 2011 U.S. Supreme Court ruling prevents a bankruptcy court from resolving hundreds of lawsuits brought by the Madoff firm's trustee.

Defendants in those cases have sought to transfer their cases to district court from bankruptcy court, citing the U.S. Supreme Court decision involving the estate of former Playboy model Anna Nicole Smith that limited the power of bankruptcy judges to review claims.

In an order published Friday, U.S. District Judge Jed Rakoff said he will review how that decision affects cases brought by the trustee, Irving Picard, against people he believes benefited improperly from Madoff's fraud.

Rakoff consolidated 341 cases in his order and gave the defendants until June 11 to appoint lead counsel to argue on their behalf. He scheduled oral argument for June 18.

Smith, who died of a drug overdose in 2007, had waged a long legal battle to get part of the fortune left by her late Texas oil baron husband, J. Howard Marshall, whom she had married in 1994 when she was 26 and he was 89.

Picard was appointed in December 2008 to recover money for victims of Madoff, a financier who ran a multibillion-dollar investment fraud over several decades, swindling investors large and small across the globe.

Madoff pleaded guilty in March 2009 to what prosecutors and the trustee have described as the biggest investment fraud in history. Madoff, 73, is serving a 150-year prison sentence.

Picard, who filed his cases in bankruptcy court, says he has recoveries and settlement agreements totaling $9.068 billion, but $6.4 billion of that is unavailable due to appeals and reserves. Picard says Madoff defrauded customers of about $20 billion.

In the latest settlement last month, Rakoff oversaw a deal between Picard and the principal owners of the New York Mets Major League Baseball team, Fred Wilpon and Saul Katz, who were longtime friends with Madoff as well as investors.

The case is Securities Investor Protection Corporation v Bernard L. Madoff Investment Securities LLC, U.S. District Court for the Southern District of New York, No. 12-mc-0115.

(Reporting By Grant McCool; Editing by Dan Grebler)

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