When one business fails, its failure spins out and also affects clients and customers. The failure of a national mega-retailer, Sports Authority, doesn’t just affect its competitors in the coming months as they have to compete with liquidation sales. The company’s bankruptcy also affects its suppliers, including big companies like Under Armour. [More]
Activist investors at Starboard Value are once again looking to shake things up at a major company. After essentially forcing the now-contested Staples-Office Depot merger, questioning the number of breadsticks handed out at Olive Garden and ousting the entire Darden Restaurant Inc. board, the investor group has launched a fight to remove the entire board of Yahoo. [More]
Customers don’t trust fast-casual Mexican-ish restaurant Chipotle very much right now, after a series of foodborne illness outbreaks in different parts of the country. The outbreaks of e. Coli, Salmonella, and norovirus were unrelated to each other, but demonstrated problems with the chain’s food-handling procedures. Now an investor has filed a lawsuit on behalf of shareholders who bought stock in the company in the last year, claiming that the company should have known about the problems with its food handling processes, and disclosed them. [More]
With all the mergers – or would-be mergers – floating around out there, Fiat Chrysler is going in the opposite direction: spinning off its Ferrari division and dropping talks of a hostile takeover of rival General Motors. [More]
Fiat Chrysler once again finds itself in the legal doghouse after some of its investors filed a class-action suit, claiming the automaker deceived them by withholding information related to the safety and computer problems in millions of vehicles in order to inflate the price of company stock. [More]
When you think of Clint Eastwood, he of the flinty-eyed gaze and chiseled jawline, you probably think about the Wild West, the wide open prairie and the cowboys who range there. Which is exactly what one scammer was counting on when he allegedly swindled $24,000 out of investors in Montana for a cowboy flick that he said would be narrated by Eastwood himself. [More]
Five months after American Express and Costco announced they would go their separate ways and end their exclusive relationship – essentially allowing members of the warehouse club to use other cards – shareholders for the credit card company have filed a lawsuit claiming it blindsided investors with the loss of the contract. [More]
The table-waiting, breadstick-hoarding board of directors over at Darden, parent company of Olive Garden, has some more extremely practical advice for its restaurants on the ground: they need to shampoo their carpets less. This is an example of an actual cost-saving measure proposed by the company’s CEO. [More]
In football, a cornerback is tasked with defending against pass offenses. It appears one former NFL player wasn’t doing much defending on behalf of investors off the field. Instead, the Securities and Exchange Commission alleges former New York Giants player Will Allen used his big league connections to assist in the operation of a $31 million Ponzi scheme based on making loans to cash-strapped pro athletes. [More]
In recent years, the airline industry has undergone a rather stark transformation through a series of mega-mergers between legacy carriers. Still, one group has been left relatively untouched: budget carriers. But the Chairman of the Board for Frontier Airlines sees a future with fewer bottom-dollar airline brands. [More]
In a dark cranny of the mortgage-servicing world a “force-placed insurance” scandal is brewing. When a homeowner’s insurance lapses, the servicer steps in and buys them a new one, at a price several factors higher than their original. And the company they buy it from is essentially themselves with a different name. Now investors are finding out about the incestuous self-dealing and kickbacks and they’re pissed. [More]
“Waterfall” provisions of asset backed securities are the rules that explain the flow of funds in the transaction, and they are are very hard to read. Blogger/professor Jayanth Varma calls them “horrendously complicated,” leading trustees to make mistakes or pull stunts that investors never expected. To remedy this, the SEC is proposing that the provisions be written in a programming language, filed on EDGAR, and made available as downloadable Python source code. [More]
The trustee who’s liquidating Bernie Madoff’s firm has released $534.2 million in repayments to some of his victims, reports Bloomberg. The half-billion is a drop in the bucket of total verified losses, which are now more than $21 billion. But hey, those 1,558 victims whose claims were approved for this partial payout are probaby pretty happy—which is more than you can say for the 2,500+ Madoff customers who may be sued to return fake profits.
Forget the bulls and bears. According to a recent news report, anthropologists are looking at a different group of animals for hints about how our “investor brains” evolved. Monkeys are the worst, as they get “easily excited at the next big investment opportunity in hopes of making a killing. Not much thought goes into what they do.” We assume anyone involved in flipping condos or speculating on dot-com stocks would qualify as a monkey.
Hey, this is getting kinda dramatic. Over in bankruptcy court land, Judge Arthur Gonzalez has decided to reveal the identities of the group of investors calling themselves “Non-TARP” lenders that are seeking to stop the auction of most of Chrysler’s assets to an entity managed by Fiat SpA, says Bloomberg.
The Ponz is everywhere! Seriously, was anyone doing any real investing over the past several years? John M. Donnelly of Charlottesville, Virginia, was arrested earlier this week and “indicted for fraudulently taking at least $11 million from as many as 31 investors in an alleged Ponzi scheme,” says their local paper the Hook. He was promising investors returns of up to 22% annually, but naturally had failed to make any investments with his clients’ money since 2002. One anonymous person—who may or may not have been a client, we don’t know—told the paper, “I visited his office once. He had a bunch of computers. It seemed like a very sophisticated operation.”