Thursday December 11 Housing and Economic stories

TOP STORIES:

LogicVision Execs mosify severance agreements for execs two days after receiving offer – (www.mercurynews.com) At the same time as it was apparently fending off uninvited takeover talk from Fremont-based Virage Logic, the board of directors at LogicVision of San Jose was fashioning new change-in-control agreements for its three top executives that helped insure bigger payouts for them.Virage Logic sent a letter yesterday to LogicVision’s board in which it said it was “sincerely disappointed in your unwillingness to engage in any substantive discussions regarding our indication of interest transmitted to you on November 10th regarding an all-cash acquisition of LogicVision.” The proposal was to pay $1.05 per share for LogicVision, a 114 percent premium to its closing price the day before the letter was sent. In his letter to LogicVision’s board, Virage’s executive chairman Daniel McCranie wrote that its position that “the company is not for sale…deserves serious reconsideration”, particularly in light of “(r)ecent economic events and the resulting downturn in business spending and the semiconductor market”, which “cast serious doubts on LogicVision’s long term future as a stand-alone public company.” Two days after evidently receiving the offer, LogicVision’s board updated its severance agreements in the event of a change in control with with Chief Executive James Healy, chief Operating Officer Fadi Maamari, and Chief Financial Officer Mei Song. In the event of an involuntary termination “within three months before or twelve months after a change of control” each executive would get a cash payment based on their salary and another based on their bonus targets. The payments would be equal to 150% of salary and bonus for Healy, and equal to 100% of salary and bonus for each Maamari and Song, immediate vesting of all options and reimbursement of health insurance premiums for each and their dependents for up to a year.

The Great Crocket Sugar Wars of 1938: Good Union Story about a Sugar Plant in Crocket CA - (www.contracostatimes.com) The 1938 strike was never about money. It was about turf: the AF of L (American Federation of Labor) versus the CIO (Congress of Industrial Organizations). But the strike didn't involve just the male workers. Their wives got involved — hundreds of their wives — and as a result of the wives' involvement, one union official lost a perfectly good suit. On March 4, 1938, the Crockett C&H Sugar Refinery laid off 200 employees and diverted 200,000 tons of raw sugar to its Eastern refineries. Production was cut in half at Crockett. Refinery officials said the layoffs were caused by uncertain labor conditions. One CIO local represented 350 warehousemen, another CIO local some 75 refinery workers. Negotiations, which had started the previous January between the warehousemen's union and C&H, had become deadlocked. The CIO officials said they couldn't resume talks until the jurisdictional dispute with the AF of L group was settled. The AF of L represented 1,300 refinery workers. The AF of L claimed it had a closed shop. The CIO claimed the AF of L was no more than a company union and that's why it created its own refinery local in Crockett. Among the 200 men laid off that March 4 were three organizers of the CIO Local 776 refinery workers. On March 11 the CIO refinery workers set up a picket line and the warehousemen refused to cross it, which closed down the factory. On Wednesday, March 16, the wives of the AF of L refinery workers met and issued an ultimatum: "Unless the men employed at the California-Hawaiian sugar refinery agree on a peace plan today which will permit reopening of the strikebound plant, their women folk will don overalls and go through the picket lines," reported the Oakland Tribune. The AF of L wives said they were not concerned with the technicalities of the strike. There were just too many unions involved fighting among themselves.

Merrill's Thain Wants $10 Million Bonus: Report - (www.cnbc.com) Merrill Lynch Chief Executive John Thain has suggested to directors that he get a 2008 bonus of as much as $10 million, but the battered company's compensation committee is resisting his request, the Wall Street Journal said, citing people familiar with the situation. The compensation committee has not reached a decision, but is leaning toward denying Thain and other senior executives bonuses for this year, the people told the paper. Merrill could not be immediately reached for comment. Shareholders on Friday approved Bank of America's takeover of Merrill, a deal fraught with risk but one that would create a banking giant with a leading position in almost every major area of the financial system. Merrill was arguably saved from extinction when it agreed to merge on Sept. 15, an hour before Lehman Brothers filed for bankruptcy. The fear was that Merrill could be next if shareholders and trading partners fled, as many did at Lehman and the former Bear Stearns.

New York Lawyer Is Arrested in Toronto - (www.nytimes.com) Very bizarre. Makes you wonder how much money is at stake here. A prominent New York lawyer, Marc S. Dreier, was arrested in Toronto earlier this week and charged with fraudulent impersonation, according to the Canadian authorities. According to Constable Wendy E. Drummond, a spokeswoman for the Toronto Police Service, Mr. Dreier, 58, was arrested at 11:25 p.m. on Tuesday on Yonge Street, a major thoroughfare in Canada’s largest city, on a charge of impersonation with intent. After a court hearing on Friday morning, Mr. Dreier was released on bail, Constable Drummond said. “The allegations are that he represented himself both verbally and with a business card as someone else and conducted business under that name,” Constable Drummond said. Law enforcement officials in Canada said that Mr. Dreier was accusing of impersonating Michael Padfield, a lawyer for the Ontario Teachers’ Pension Plan. The Globe and Mail of Toronto reported that Mr. Dreier was “charged with impersonation in connection with a proposed multimillion-dollar agreement between the Ontario Teachers’ Pension Plan and the financial company Fortress Credit Opportunities.” Debra Hanna, a spokeswoman for the Ontario Teachers’ Pension Plan, said in a statement on Friday morning: On Tuesday afternoon, we learned of fraudulent behavior by an individual visiting our premises. We immediately alerted the police. An individual was arrested by the police and has been charged. No Teachers’ Pension fund staff member was involved in the fraudulent behavior. We’ve reviewed our security procedures in relation to this situation and we believe that no Teachers’ Pension funds are involved.

Debt-laden Tribune Co. prepares for possible bankruptcy filing - (www.latimes.com) The company that owns the Los Angeles Times, Chicago Tribune and Chicago Cubs baseball team is preparing for a possible bankruptcy filing as it attempts to renegotiate $12 billion in debt obligations with banks and other creditors, a Tribune Co. official said Sunday. The Chicago media conglomerate hired Lazard Ltd. a little more than a week ago for advice on a possible Chapter 11 filing, though people familiar with internal talks said the company was exploring several options. Tribune and many other newspaper owners, already hurting from the migration of advertising revenue to the Internet, have suffered even greater losses with the broad economic downturn. The financial slump also has hampered the company's attempts to sell assets, in particular Major League Baseball's Chicago Cubs, at a premium price to help pay accelerated debt payments due next year. "Revenue declines have been dramatically worse, even over the last couple of weeks. It's just really rough," said the Tribune executive, who declined to be named because he was not authorized to speak publicly about the company. "A number of advertisers just don't have the money to spend right now. "Some advertisers are still pushing to get through the holiday season, but when others look to cut discretionary spending, we are right at the top of the list," the executive said. Tribune must make a $512-million debt payment in June, money that was to come from asset sales that now are hamstrung by the credit crunch. "Getting a deal done on the Cubs or on a number of other properties is extremely difficult. Other sources of capital and debt have been significantly hampered," the Tribune executive said. "Layer on that a business that has been in decline for years and a failing economy, and it's a perfect storm."
New law leaves AmeriDream without a mission - (www.bizjournals.com) - Since its founding in 1999, the organization has helped nearly 274,000 homebuyers by funneling seller cash gifts to them. It earns a fee of $500 for each sale and became one of the largest such charities in the country. All that came to an end on Oct. 1, when seller-funded down payments became illegal, leaving AmeriDream with an estimated $32 million collected before the ban and plenty of downtime to ponder its future. “Obviously, we’ve been working to get it reinstated,” said Ann Ashburn, chief executive officer of the charity, which serves as a conduit for home sellers to provide cash gifts to buyers so they qualify for Federal Housing Administration insurance.

Morgan Stanley M&A Head MacDonald Dead at 47 - (www.cnbc.com) This was probably a very stressful job the past 2 years with the credit crisis in effect, and M&A deals way down. Gavin MacDonald, the head of mergers and acquisitions at Morgan Stanley, has died. He was 47. MacDonald died on Friday evening, after suffering a heart attack at Morgan Stanley's offices in Canary Wharf, London, earlier last week, Morgan Stanley spokesman Michael Wang said. A founding member of Morgan Stanley's European M&A team, MacDonald had worked on a string of multi-billion dollar deals, and became global head of M&A in 2007 -- the first London-based banker to hold that role for the Wall Street firm. "Gavin was an extremely decent, universally liked, funny, selfless and deeply valued man. He was also a close and generous friend to many of us," Morgan Stanley Chief Executive John Mack said in a company-wide message. "He will be greatly missed." MacDonald spent his whole career at Morgan Stanley, joining the firm as a financial analyst in 1983 with a first-class degree in law from Cambridge University.

A Money-Fund Manager's Fateful Shift - (online.wsj.com) Bruce R. Bent, co-founder of the first money-market fund, was long known in the financial community for espousing an ultra-conservative investment philosophy. So when his Reserve Primary Fund suffered losses with the collapse of Lehman Brothers Holdings Inc. -- "breaking the buck," in Wall Street parlance -- his investors were shocked. Now, information is emerging that's raising new questions about Reserve's handling of the affair. The Primary Fund recently acknowledged having given inaccurate information in its initial disclosure of fund trouble in September.



OTHER STORIES:

NYT to Borrow against Building - (www.cnbc.com) The New York Times Company plans to borrow up to $225 million against its mid-Manhattan headquarters building, to ease a potential cash flow squeeze as the company grapples with tighter credit and shrinking profits. The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James M. Follo, the Times Company’s chief financial officer.
Bay Area Restaurants Hungry - (www.sfgate.com) Even in an area known for its obsession with food, some say revenue is down as much as 40 percent. Stacy Finz
Recycling Industry Falters - (www.sfgate.com) As consumer demand for autos, appliances, new homes falls, so do steel and pulp mills' demand for scrap, paper.
3M Slashes 2009 Guidance, Will Cut 1,800 Jobs - (www.cnbc.com)
MetLife Outlook Disappoints - (www.cnbc.com)

How Freddie Mac Splashed Cash to Halt Regulation - (www.cnbc.com)
Housing Chief Sees No 'Target' in Mortgage Rates - (www.cnbc.com)
Obama Pledges to Force Banking Accountability - (www.cnbc.com)
Layoffs Expected to Decimate Wall Street Ranks - (www.cnbc.com)

Dollar slides as Obama vows stimulus - (www.marketwatch.com)
Gold Rebounds as Dollar Drops, Commodities Rally; Silver Jumps - (www.bloomberg.com)
Treasuries Fall as U.S. to Sell More Securities Than Expected - (www.bloomberg.com)
Oil, Copper Advance After Obama Promises Public Works Spending - (www.bloomberg.com)
Stocks Rally Worldwide, Dow Hits One-Month High on Obama Plan - (www.bloomberg.com)
Majority of Modified Loans Fail Again, Regulator Says - (www.bloomberg.com)
Lawyer Dreier Charged by U.S. With $100 Million Fraud - (www.bloomberg.com)
Even hedge funds with gains face redemptions - (www.reuters.com)

Citadel closing Tokyo office, cuts HK jobs: reports - (www.reuters.com)
German Industrial Output Drops on Machinery Orders - (www.bloombrg.com)
Japan Bank Lending Grows at Fastest Pace Since 1992 - (www.bloomberg.com)
In String of Bad News, Omens of a Long Recession - (www.nytimes.com)
Record 10% of U.S. homeowners in arrears or foreclosure - (www.chicagotribune.com)
Texas Instruments Reduces Earnings, Sales Forecasts - (www.bloomberg.com)
3M cutting nearly 1,800 positions - (www.reuters.com)
Back at Junk Value, Recyclables Are Piling Up - (www.nytimes.com)