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Florida Times-Union – CSX Corp.’s proxy fight with two hedge funds ended in September with four nominees from The Children’s Investment Fund Management LLP and 3G Capital Partners Ltd. winning election to CSX’s board.
But even though the fight is long over, it continues to be in the news.
Last week, Securities and Exchange Commission Chairwoman Mary Schapiro told a U.S. Senate subcommittee that the commission is considering new disclosure rules on equity swap arrangements. According to a Bloomberg News story, the SEC’s examination of equity swaps is a direct result of CSX’s battle with TCI and 3G.
Forbes – CSX Corp. said a New York Federal Court has approved a settlement in which the railroad operator will be paid $11 million by two activist shareholder hedge funds over alleged securities law violations.
CSX said late Friday it will receive $10 million from TCI, which manages The Children’s Master Investment Fund, and $1 million from 3G Capital Management, less $550,000 in attorney’s fees and other expenses.
Charleston Daily Mail – The Greenbrier has been a powerful asset to West Virginia since before the state was a state. Its corporate parent today, Florida-based CSX Corp., recently announced that it has hired Goldman Sachs to make the resort a "viable entity."
The resort lost $35 million in 2008.
It’s easy to understand why CSX would want the Greenbrier, only one of its concerns, to earn its keep.
As the Wall Street Journal noted, the railroad industry is grappling with a severe drop in freight volume, the hospitality industry is in a serious slump, and CSX has been harried by hedge funds that questioned its investments and called for a management overhaul. That dispute put five new faces on the 12-member board.
Reuters – General Motors Corp and Chrysler LLC are considering accepting a pre-arranged bankruptcy as the last-resort price of getting a multi billion dollar government bailout, Bloomberg reported, citing a person familiar with internal discussions.
In response to automakers’ bailout plea, staff for three members of Congress have asked restructuring experts if a pre-arranged bankruptcy — negotiated with workers, creditors and lenders — could be used to reorganize the sector without liquidation, Bloomberg said.
General Motors and Chrysler could not be immediately reached for comment by Reuters.
Industry executives and analysts say the immediate carnage from a bankruptcy of General Motors Corp, Ford Motor Co or Chrysler would spread throughout an industry that is bleeding cash in a global slowdown.
New York (HedgeCo.Net) – Board members of General Motors met this past weekend to go over a proposal that will be presented to Congress today in hopes of securing up to $12 billion in emergency funding. The money is part of a larger, $25 billion bailout plan that GM, Ford and Chrysler have been seeking.
After originally rejecting the plan, Congress told the big three auto makers to present a revised version of their request, with detailed information on how they will use the money to turn their companies around.
Chrysler, who has vocalized their need for an alliance with GM and Ford in order to weather the financial crisis, is also busy putting the finishing touches on their revised plan. “Chrysler is fine-tuning its original plan to meet the reset requite from congressional leadership,” said spokesperson for the company, Lori McTavish. “The company’s board will be part of the final review process leading up to Tuesday’s submission.”
The automakers are expected to present a plan that focuses more on fuel-saving new technology that could eventually yield 35 miles per gallon on their vehicles, in addition to slashing executive pay and bonuses. Ford, who is least troubled by financial woes out of the three, is expected to only seek a line of credit from the government.
The automakers have faced increased reluctance from many members of Congress, after months of government handouts to major financial institutionals. Speaker of the House Nancy Pelosi and Senate Majority Leader Harry Reid recently sent a letter to the three executives, saying that they must be "making significant sacrifices and major changes to their way of doing business," which will be presented in today’s plan.
Julie Scuderi Senior Editor for HedgeCo.Net Email: julie@hedgeco.net
The Washington Times – A transition adviser to President-elect Barack Obama earned millions of dollars overseeing an office that led a lobbying effort to prevent increased oversight of mortgage giant Fannie Mae, the company at the heart of the ongoing turmoil in the nation’s financial markets, public records show.
The unpaid adviser, Thomas E. Donilon, held several senior positions at Fannie Mae from 1999 to 2005, including vice president of law and policy, at a time when the company’s officers and lobbyists were insisting that now-troubled Fannie’s finances were sound.
In a 2006 report, the Office of Federal Housing Enterprise Oversight (OFHEO) said Fannie Mae lobbyists, whose office was overseen by Mr. Donilon, tried to use their ties to members of Congress to discredit federal regulators through a campaign aimed at securing the release of a U.S. Department of Housing and Urban Development report to discredit OFHEO.
West Palm Beach (HedgeCo.net) – The following statement was issued by Biotechnology Industry Organization (BIO) President and CEO Jim Greenwood following the U.S. elections:
"On behalf of the more than 1,200 members of the Biotechnology Industry Organization, I offer our congratulations to Senator Barack Obama on his election victory. We also offer our congratulations to the newly elected and returning members of Congress, governors and other elected officials across the United States.
"From health care to energy to climate change to environmental sustainability, President-elect Obama will enter office facing a daunting array of complex challenges threatening the well-being of our nation and the environmental health of our planet.
"Biotechnology is uniquely suited to help provide answers to these challenges. Biotechnology provides hope for millions of people suffering from debilitating diseases like cancer, H.I.V.-AIDS, Parkinson’s and diabetes. By reducing the incidence of disease, we can dramatically reduce health care costs and help spur economic growth. Biotechnology provides the key to sustainable, renewable alternative fuels that increase our nation’s energy security. And we develop crops that produce more food per acre while requiring less plowing, reducing fuel use, carbon dioxide emissions, and overall environmental impact.
"Biotechnology is one of the most promising sectors of America’s burgeoning innovation economy. To continue our nation’s global leadership in innovation and continue to fulfill the promise of biotechnology, we will work with President-elect Obama and the new Congress to ensure that we have the proper public policies that promote and facilitate continued innovation.
"We must maintain strong protections for intellectual property – the key to an innovation economy – while enhancing patent quality and the objectivity, predictability, and transparency of the patent system. We must increase resources for the federal Food and Drug Administration to enable the agency to keep pace with rapidly evolving biomedical science and make sound regulatory decisions in a timely and efficient manner. We must provide the tax and investment incentives that promote continued biotech innovation and help accelerate the commercialization of advanced biofuels technologies. And we must ensure the National Institutes of Health have the funding needed to sustain the public-private collaboration that is transforming biomedical discoveries into innovative treatments for patients. At the same time, we need the proper policies and incentives at the state and local level to help grow and nurture biotechnology research and product development to ensure America remains the world leader in biotechnology innovation.
"We look forward to working with President-elect Obama, the new Congress and public officials at all levels of government to achieve these goals and continue to build our nation’s innovation economy. Together, we can implement the public policies necessary to help heal, fuel, feed and clean our nation.”
BIO represents more than 1,200 biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world.
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