An Idaho District Court judge has rebuked the attorneys representing Corrections Corp. of America as well as a group of inmates that sued the Nashville-based company over prison conditions they say led to an attack on them. The message from Judge Edward Lodge to both groups of lawyers: Play nice.
"Many of the motions and briefs filed by both parties are full of hyperbole and include unfounded accusations against opposing counsel," Lodge wrote in his order sending the sides to mediation. "... In participating in the conference, all counsel shall act reasonably."
California lawmakers have approved Gov. Jerry Brown's plan to rent prison beds from private operators Corrections Corp. of America and GEO Group in order to comply with a court order aiming to alleviate overcrowding. An analyst said earlier this week the move could boost Nashville-based CCA's funds from operations by 8 percent.
California Gov. Jerry Brown is moving forward with a plan to appropriate more than $1.1 billion over the next three years to move 12,500 inmates from the state's crowded prisons. A large slice of that money is set to go toward Nashville-based Corrections Corp. of America under a plan first proposed two weeks ago. Local SunTrust Robinson Humphrey analyst Tobey Sommer tells Bloomberg the impact will be significant — as in an 8 percent boost to funds from operations.
While Democrats control the legislature, Brown’s plan isn’t certain to pass. It is opposed by Democrats in the Senate who put forward an alternative to spend $200 million in grants for counties to expand rehabilitation, drug and mental-health treatment programs that they said would reduce recidivism. Their plan also calls for an advisory commission to look at sentencing changes.
Corrections Corp. of America could soon be scoring some more business from the state of California, whose leaders continue to struggle to meet a court order calling for less crowded facilities. Gov. Jerry Brown on Tuesday told reporters he is prepared to spend $315 million to lease a CCA facility in the Mojave desert and take up other private prison space. A big contract with the Golden State could help shares of CCA (Ticker: CXW) regain some of the 10 percent they've lost in the past three months.
SEE ALSO: CCA gets boost from California contract renewal from last month
Avondale Partners analyst Kevin Campbell says investors should continue to accumulate shares of Corrections Corp. of America. The Nashville-based prison manager has a strong balance sheet, solid profit growth prospects and a nice dividend yield, Campbell told his clients earlier this week. But he did also lower his price target for the company's shares to $38 from $44. The culprit: Rising interest rates that have reduced the relative attractiveness of real estate investment trusts. CCA stock (Ticker: CXW) is up slightly this morning to about $34.60.
A federal judge in Idaho had his eyebrow raised high Wednesday during a hearing to decide whether Corrections Corp. of America is living up to the terms of a 2011 staffing agreement for a Boise prison. Judge David Carter pressed CCA Assistant General and Ethics Officer Scott Craddock about just how many shifts CCA did not fully staff in 2012 at the Idaho Correctional Center.
"As I understand it, CCA has represented they're going to pay back IDOC. What amount should they pay them?" the judge asked Craddock.
"Let's add together," he said, "4800 hours, plus 152, plus 300, what is that? ... And we don't know what the day shift for gosh, July, August, September, October, November, we don't know that, do we? So 4800 hours is kind of a pretty low number, isn't it?"
"We reported what we did a detailed report on," Craddock said, saying they based the estimate on the period they investigated, which was the night shift for seven months.
Also testifying Wednesday was former Idaho Correctional Center Warden Tim Wengler, who said he was not aware that shifts were going unfilled and said somebody working for him had falsified the company's records. A CCA attorney said the company shouldn't be punished for the scheduling shortfalls, saying it has made efforts to improve the staffing situation and pointing out that assaults at the prison have not increased.
A trading plan set up by Todd Mullenger, the CFO of Corrections Corp. of America, last week exercised 50,000 options granted him from 2008 to 2010 and sold the resulting shares. (Click here and here for the details.) Mullenger's profit on the transactions, which came after CCA shares (Ticker: CXW) gave up almost 20 percent in six weeks, came to more than $1.1 million.
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