Wednesday morning headlines

State bankruptcy filings are up: California had a 33 percent increase during the first two months of the year, higher than even Florida (26 percent). February, in fact, was the busiest month for filings since Congress overhauled the bankruptcy law in 2005 to make the process more complicated and expensive. But bankruptcy experts caution that data from just one or two months can be misleading. From the NYT:

“The monthly bankruptcy filing rate has a lot of cyclicality,” Robert M. Lawless, a professor of law at the University of Illinois College of Law, wrote on Tuesday on the widely read bankruptcy blog, Creditslips.org. Some experts, for example, say bankruptcies often seem to rise in February as debts from the holiday season come due. Even so, the trend is definitely upward, Mr. Lawless wrote. States as disparate as Kentucky and Rhode Island joined the top 10 list, and the absolute number of filings rose significantly.

Day of the Pellican: Jury selection finally gets underway in the trial of L.A. gumshoe Anthony Pellicano, who is charged with racketeering and wiretapping. Several big Hollywood names have admitted hiring Pellicano - among them Brad Grey, chairman of Paramount Pictures, and ex-super-agent Michael Ovitz. But they all deny knowing anything about his suspected wiretapping. Those charged with conspiring with Pellicano include a former police detective, a retired telephone company repairman, a computer programmer and a litigious Israeli businessman. Adding a dash to the proceedings will be Pellicano defending himself. The LAT has a flow chart of the cast of characters. From the NYT:

For Mr. Grey, who has steered Paramount’s comeback from sixth place to first at the box office among the big studios, it would mean having to revisit an unseemly lawsuit in which a screenwriter-producer, Bo Zenga, accused Mr. Grey, then the head of a talent management firm, of hogging the credit and profits from a movie. For Mr. Ovitz, who has been trying to make a comeback in other businesses since being forced to sell his Artists Management Group in 2002, it would mean having to discuss publicly his talks with Mr. Pellicano about journalists whose coverage he disliked, among them the free-lance journalist Anita Busch, and Bernard Weinraub, then a reporter for The New York Times.

Backdating suit settled: Ex-Broadcom executive Nancy Tullos agreed to a $1.3-million settlement to cover claims she participated in a scheme to backdate stock options at the OC chip maker. She will not turn over any money because the penalty will be canceled out by the loss of her Broadcom stock options. But she will pay a $100,000 fine. Tullos pleaded guilty to one count of obstruction of justice earlier this year in a plea deal. She is expected to cooperate in an investigation of Broadcom founders of Broadcom, Henry T. Nicholas III and Henry Samueli. (AP)

The price of car crashes: They cost the L.A. area more than $10 billion a year, or $817 per person, when factoring property damage, lost earnings, emergency services, legal costs and traffic delays. The numbers come from an AAA research report. NY was tops on the list of major cities, at $18 billion a year. (AP)

Grocery law struck down: A Superior Court Judge ruled that a 2005 ordinance requiring grocery store operators to retain workers for 90 days after a store changes ownership was unconstitutional. He found that it conflicts with existing state laws and is therefore pre-empted by the state retail food code. The ordinance had been crafted in response to reports at the time that Albertson’s was close to accepting a buyout offer. (LABJ)

Book fraud: There's lots of hand-wringing in the publishing world over the fabricated memoir “Love and Consequences,” whose author lied about growing up as a foster child in South Los Angeles. The publishing house has recalled nearly 19,000 copies of the book and is offering refunds to book buyers. Both the publisher and editor insist that they took measures to ensure that the writer, Margaret Seltzer, was telling the truth. But there was no fact-checking and the book's editor had never even met Seltzer. (LAT)

SAG update: The Screen Actors Guild said it would offer contracts guaranteeing that producers of independent films could keep shooting past the June 30 expiration of the union contract. Only producers who do not have financing or distribution with a studio or company that's a guild signatory would qualify. Producers also would have to agree to abide by any SAG interim contract. The move is aimed at reassuring bonding companies. (LAT)

Fremont gets default notice: It involves $3.15 billion of subprime mortgages that the Brea-based parent of Fremont Investment & Loan sold last March. Fremont said that because of "limited available liquidity," it can neither deposit cash into a reserve account, nor provide a letter of credit to satisfy a tangible net worth covenant associated with guarantees it provided in the loan sale. Fremont had been one of the 10 largest U.S. subprime mortgage lenders until regulators ordered it to stop the risky lending. (Reuters)

Ryland is fined: The Calabasas-based homebuilder was accused by the North Carolina banking commissioner's office of employing unlicensed loan officers and charging borrowers excessive fees. Ryland has agreed to a settlement in which it doesn't admit wrongdoing but refunds 850 buyers about $250 each and pays a $161,000 fine. (WSJ)

Going overboard on attorney fees: How does someone disputing $44.63 in overtime wind up seeking $46,000 in attorney fees? Apparently it centers on police officer Michael Harrington's effort to turn the case into a class action. "At the risk of understatement," wrote Justice Miriam Vogel Los Angeles' 2nd District Court of Appeal, "there is no way on Earth this case justified the hours purportedly billed by Harrington's lawyers." He was represented by Los Angeles' Harris & Ruble. From The Recorder:

Much of the appellate ruling quotes verbatim from the decision by L.A. County Superior Court Judge William Fahey, who denied the class certification motion and rejected the $46,000 fee request. Fahey noted that five lawyers and one paralegal from Harris & Ruble worked on Harrington's case -- at a low rate of $200 per hour for one person and a high of $525 per hour billed by partner Alan Harris. The court noted that Harris billed about 38 percent of all hours.