The lawyer appointed to unravel what the government calls a multibillion-dollar ponzi scheme run by Texas businessman R. Allen Stanford is firing back at critics. Ralph Janvey’s critics have alleged that the court-appointed receiver’s request for $27 million in attorney’s fees is excessive. Janvey has now escalated the unusual public battle over the fees with the Securities and Exchange Commission. In court papers filed Tuesday evening in federal court in Dallas, his attorneys argue that the fees are necessary because the Stanford case is far-flung and complex, “yet those who oppose payment to the receiver claim to be shocked that a big cleanup produces a big bill.” The SEC, Stanford, officials in the Caribbean island nation of Antigua and the court-appointed examiner who represents jilted investors oppose Janvey’s bill.
Meanwhile, Stanford is back in the jail infirmary in Conroe at the Joe Corley Detention Facility after treatment for a heart condition. Original defense attorney Dick DeGuerin says Stanford was discharged from Conroe Regional Medical Center Monday after a cardiac catheterization test. DeGuerin says Stanford has an aneurysm in his leg. Stanford was hospitalized last Thursday because of a racing heart just before his former chief financial officer, James Davis, entered a guilty plea in court. He was also scheduled to go to court that day to discuss his legal representation. DeGuerin has asked to withdraw from the case, and other attorneys Stanford have approached want guarantees of payment. Stanford’s assets have been frozen.
A south Texas wind farm will get more than $114 million in federal money in support of clean energy projects. The funding was announced in Washington by Treasury Secretary Tim Geithner and Energy Secretary Steven Chu. Overall, $502 million will be doled out in the first round of awards from the American Recovery and Reinvestment Act. The only Texas project to receive funding, in the initial phase of the program, is the Penascal Wind Farm south of Sarita.
The Postal Service has narrowed the number of offices facing possible closure to 413. The service is struggling with a sharp decline in mail volume caused by the recession and the movement of traditional mail to the Internet. Postal officials say the agency could have a deficit as large as $7 billion this year. Being on the list doesn’t guarantee closing, but the list of offices selected for a closer look had neared 700 at one point. Currently the post office has about 37,000 retail outlets across the country and Postmaster General John Potter has said he wants to keep as many open as possible.
The world’s largest drug maker will pay a record $2.3 billion civil and criminal penalty over unlawful prescription drug promotions. The Justice Department says the $2.3 billion settlement with Pfizer includes the largest criminal fine in U.S. history, at $1.2 billion. The overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules. The government says the company illegally promoted four prescription drugs, including the pain killer Bextra, as treatments for medical conditions different from those the drugs had been approved for by federal regulators. Under terms of the settlement, Pfizer must pay $1 billion to compensate Medicaid, Medicare, and other federal health care programs. The Texas Medicare program will recover $55 million in a state-federal government share. A Pfizer subsidiary has entered an agreement to plead guilty to one count of felony misbranding. Pfizer says it regrets “certain actions taken in the past” but is proud of steps it has taken to strengthen internal controls.
Worker productivity grew at the fastest pace in nearly six years in the spring while labor costs fell by the most in nine years, as companies slashed costs to survive the recession. The Labor Department says productivity, the amount of output per hour of work, rose at an annual rate of 6.6 per cent in the April-June quarter, the largest advance since the summer of 2003. Economists expected an increase of 6.4 per cent, matching the government’s initial estimate last month. Labor costs fell at an annual rate of 5.9 per cent. That’s the largest drop since the second quarter of 2000, and slightly bigger than the 5.8 per cent decline estimated a month ago.
Orders to U.S. factories rose less than expected in July as reduced demand for petroleum products offset a jump in orders for aircraft and other transportation goods. The Commerce Department says factory orders rose 1.3 per cent in July, the fifth increase in the past six months. But that’s below analysts’ expectations of a 2.2 per cent increase, according to a survey by Thomson Reuters. An 18.5 per cent jump in transportation goods drove the overall increase. Orders for commercial aircraft and parts doubled after that volatile category fell 30 per cent in June. Orders for nondurable goods, such as food, petroleum products and chemicals, fell 1.9 per cent, the most since December.
BP says it has made a “giant” oil discovery in the Gulf of Mexico but has not yet determined the size and commercial potential of the find. The company said that the well, in Keathley Canyon Block 102 about 250 miles southeast of Houston, is in 4,132 feet of water, the company said. The Tiber well was drilled to a total depth of 35,055 feet, making it one of the deepest wells ever drilled by the oil and gas industry, BP said. BP has a 62 per cent interest in Tiber, while Petrobras holds 20 per cent and ConocoPhillips has 18 per cent.
The Houston Association of Realtors has elected Margie Dorrance of Keller Williams Realty Metropolitan as its next executive committee chairwoman. Joining her is chairman-elect Carlos Bujosa of McDade, Smith, Gould, Johnston, Mason. Immediate past chairwoman Vicki Fullerton and three other committee members were elected, and nine directors have been appointed.
HAR says its four-months-old MLSCloud Web site has about 502,000 participating real estate and broker members using the service. The site promotes collaboration between member real estate associations and Multiple Listing Services that operate public MLS Web sites. The home page features a U.S. map with interactive flags that link to participating MLS Web sites and real estate groups.
A federal bankruptcy judge has approved preliminary motions that will help the publisher of the Orange County Register in California operate during Chapter 11 proceedings. First-day motions approved by Judge Kevin Carey in Wilmington, Delaware, include authorization to pay vendors, maintain bank accounts and cash management programs and use cash collateral for operating costs. Freedom Communications Holdings, which owns the Register, dozens of other newspapers, and eight televisions stations, sought bankruptcy protection on Tuesday, citing a steep drop in advertising revenue. The filing was part of a prepackaged plan approved by a majority of the company’s lenders, which should minimize the haggling that can bog down bankruptcy proceedings. An initial meeting of unsecured creditors is scheduled for next Wednesday, with a second court hearing on October 5th. In Texas, the company owns the Odessa American, the Monitor in McAllen, the Valley Morning Star in Harlingen, the Brownsville Herald and the weekly Mid-Valley Town Crier in Weslaco. It also owns KFDM-TV in Beaumont.
The Michigan House has approved tax breaks for two alternative energy companies that plan to buy a closed Ford factory near Detroit and convert it into the country’s largest renewable energy park. The measure passed 90-17. It now goes to the Senate. Xtreme Power of Kyle, Texas, and Clairvoyant Energy of Santa Barbara, California, have said that if state tax incentives and federal loans are approved, they’ll purchase and refurbish the sprawling 320-acre Wixom assembly plant 25 miles northwest of Detroit. The plant was closed in 2007 as part of Ford’s restructuring after churning out cars for 50 years. The park could employ at least 2,800 workers building storage batteries, solar panels and possibly wind turbines.
Treasury Secretary Timothy Geithner says efforts by the United States and other nations to fight a worldwide economic crisis have been able to pull the global economy back from the abyss. But Geithner says countries must continue to provide sizable amounts of support until there are clearer signs of recovery. He says he will stress that point in meetings of financial ministers in London that start Friday.
New documents show Federal Reserve policymakers had greater confidence in August that the recession was ending and felt comfortable slowing the pace of one of its economic revival programs. Minutes of the central bank’s closed door deliberations, held August 11th-12TH, also show Fed Chairman Ben Bernanke and his colleagues striking a much more hopeful note about the economy’s prospects compared with an assessment made in late June. The documents say many Fed officials saw “smaller downside risks.”
Regulators are imposing new restrictions on leveraged exchange-traded funds. Those are volatile investments that can multiply gains or losses of a market index or benchmark. Traditional ETFs track a market index, and can be traded throughout the day, unlike mutual funds. Leveraged ETFs seek to deliver multiples of an index or benchmark, often in volatile areas such as commodities or currencies. The financial industry regulatory authority issued a notice that it will increase customer margin requirements in leveraged ETFs beginning December 1st. The requirements boost the amount an investor must deposit with a broker before they can borrow to invest “on Margin” in the products. Both Finra, an independent industry regulator, and government regulators have recently issued warnings highlighting risks for investors in leveraged ETFs.
A government auditor says more work is needed to ensure the safety of Mexican trucks and buses awaiting permission to drive on U.S. roadways. The U.S. Transportation Department’s inspector general’s office made public its latest report on Mexican truck and bus safety. The audit says some states are not consistently reporting traffic convictions of people driving in the U.S. with Mexican drivers’ licenses. Also, bus inspections are not being done, are done infrequently or have other problems. The inspector general’s report says officials have made headway on other safety measures. The North American Free Trade Agreement granted Mexican trucks and buses access to American roadways but Congress has refused to comply because of safety and job loss concerns.
Red Mango has awarded two franchise development agreements to open six nonfat yogurt stores in the Houston area, according to the Houston Business Journal. Three will open in Montgomery County, starting with a store in The Woodlands on Six Pines Drive in November. An outlet in West University will lead the construction of three other outlets. Dallas-based Red Mango currently operates in more than 50 locations nationwide.
Einstein Noah Restaurant Group is opening five new Einstein Bros. Bagels locations in Houston, according to the Houston Business Journal. Einstein Bros. has around 60 stores nationwide. Two more are set to open in Texas by the end of this year, in Tyler and in San Antonio.
Continental Airlines reports an August load factor of 85.8 per cent—1.9 points above August 2008’s factor, and a record for the month. The Houston-based air carrier recorded a DOT on-time arrival rate of 82.4 per cent and a completion factor of 99.8 per cent. Continental, however, saw a traffic decrease of 3.9 per cent with a capacity decrease of six per cent compared to last year at this time.
Hawaiian Airlines says it will join its competitors in charging a fee for the first checked bag on interisland flights. Hawaiian announced that the $10 fee will go into effect September 14th.
Southwest Airlines is starting to charge some customers to be able to board aircraft sooner. The Dallas-based discount carrier said that for an extra $10 each way Southwest passengers can automatically reserve a boarding position prior to general check-in. That would allow those customers to begin boarding the plane after certain elite fliers, who don’t have to pay add-on fees for early boarding privileges, with first dibs on the overhead storage compartment. Unlike other carriers, Southwest does not offer assigned seating. The new offering, which can be purchased up to 25 hours prior to the scheduled departure time of the customer’s flight, is available for purchase for travel beginning Thursday.