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July 8, 2005
Office–Market Turnaround Continues
The office market expanded strongly in the second quarter as
companies leased more space, a sign they expect to expand their work
forces, the Wall Street Journal reported. Office-building
vacancies reached their lowest level in three years. The national
vacancy rate dropped to 15.4 percent in the second quarter from 15.9
percent in the first quarter, according to the survey of the top 67 U.S.
office markets by Reis Inc., a New York–based real-estate research
firm.
Retail Sales Increased Last Month
Retail sales increased in June, from luxury to midmarket to discount,
the New York Times reported. The strong numbers were a
surprise to analysts. Wal-Mart reported increases of 4.5 percent in
sales at stores open at least a year for its customers.
href='http://www.nytimes.com/2005/07/08/business/08shops.html'>Read the
full article.
GM Likely to Help Delphi Avoid Bankruptcy—Analyst
Auto parts supplier Delphi Corp. is likely to reach a restructuring
deal with General Motors Corp. and its main union to avoid bankruptcy,
an analyst said yesterday, Reuters reported. “Despite considerable
fundamental problems, it is increasingly likely that Delphi’s
former parent, GM, will save the company from bankruptcy,” Merrill
Lynch analyst John Casesa said.
Bombings Could Have Deep Impact on Airline Industry
Although London’s airports remained open throughout the
attacks, they could have a deeper impact on the airline industry than
last year’s train bombings in Madrid did, the New York
Times reported. Read the full article at
href='http://www.nytimes.com/'>www.nytimes.com.
Jetblue Sees Profit Amid ‘Unsustainable’ Market
JetBlue Airways Corp. expects to be profitable for the rest of the
year, its CEO said in an interview yesterday, even as record oil prices
threaten to push its rivals into bankruptcy, Reuters reported. The New
York–based discount airline should prosper compared with rival
carriers thanks to full planes and low costs as high fuel prices hobble
competitors, CEO David Neeleman told Reuters.
Enron’s Lea Fastow Released After Year In Jail
Lea Fastow, wife of former Enron Corp CFO Andrew Fastow, was released
from a halfway house today, ending a year in jail for filing a false tax
return that tried to disguise her husband’s illicit income, her
attorney said. Lea Fastow, who was an assistant treasurer at the
now-bankrupt Enron, pleaded guilty to the false tax return charge in a
plea bargain with prosecutors and was sentenced to one year behind bars
by U.S. District Judge David Hittner.
Northwestern Rejects MPP’s $1.1 Billion Takeover Bid
Utility NorthWestern Corp. yesterday rejected a $1.1 billion
unsolicited takeover offer from Montana Public Power Inc. (MPP), calling
the price inadequate and the financial structure risky, Reuters
reported. The company’s board of directors said the proposal from
MPP, a consortium formed by a number of Montana cities, presented
“unacceptable risks” that raised doubts whether a deal would
ever close.
Raytech Shareholder Plans to Take Company Private
Auto parts maker Raytech Corp. yesterday said its largest
shareholder, a trust to resolve asbestos injury claims, plans to take it
private by acquiring shares from environmental creditors and others,
Reuters reported. The trust plans to raise its stake to 90.6 percent by
acquiring shares and other rights from environmental creditors to
Raytech’s 2001 bankruptcy reorganization for $9.5 million. It then
would offer $1.32 per share for the rest of the stock.
Deloitte Seeks to Settle Parmalat Claims
Accounting firm Deloitte would settle part of two $10 billion-plus
claims against it for its role as auditor of bankrupt Parmalat, its
global CEO told Reuters yesterday. Italian food producer Parmalat filed
for bankruptcy at the end of 2003 under debts of 14 billion euros ($16.9
billion), after the discovery that a supposed 4 billion euro account
with Bank of America was fake. Deloitte says it would offer a financial
settlement to close the actions against it.
NCO Group to Buy RMA Assets for $119 Million
NCO Group, which provides business outsourcing services, yesterday
said it agreed to buy the operating assets of Risk Management
Alternatives Inc. for $118.8 million in cash, Reuters reported. RMA
provides debt collection and accounts receivable management services. In
conjunction with the agreement, RMA and several of its domestic
affiliates have filed for bankruptcy protection, and the transaction
will be conducted under the U.S. Bankruptcy Code.