WCI Files for Chapter 11
Carl C. Icahn's WCI Communities became the latest casualty of the housing market crisis, filing for Chapter 11 bankruptcy protection after the home builder failed to get additional financing in the face of massive losses. Icahn, chairman of WCI's board, said the filing was necessary because the Bonita Springs, Fla., developer's entire $1.8 billion debt may soon be in default. Icahn said this was confirmed when some holders of $125 million convertible notes insisted on being paid in cash in full today.
WCI also fired chief executive Jerry L. Starkey and replaced him on an interim basis with David L. Fry.
Day-to-day operations, including selling, building and delivering homes, will continue, and employees will still come to work and be paid, the company said.
WCI and about 130 of its subsidiaries filed petitions to restructure their debt and capital.
JetBlue Charging for Pillows
JetBlue Airways said that it is now charging customers for pillows and blankets. The carrier has done away with the recycled blankets and pillows used on its flights and has started offering an "eco-friendly" travel blanket and pillow that can be bought for $7 on flights longer than two hours. The pair come in a kit with a $5 coupon to Bed Bath & Beyond.
The carrier says the pillow and blanket feature a fabric technology, developed by CleanBrands, that blocks pesky critters like dust mites, mold spores, pollen and pet dander.
The blanket and pillow kit is the latest in a string of a la carte items the company says are providing a revenue boost to help offset the soaring price of jet fuel.
Motorola Nabs Qualcomm Official
Motorola snagged Sanjay Jha, Qualcomm's chief operating officer, to lead its handset division as that unit prepares to become an independent company. Jha will also be co-chief executive of the parent company, sharing the responsibility with Greg Brown until the spinoff next year. Brown will take responsibility for Motorola's other two divisions.
Motorola's handset division has been posting heavy losses for the past few years. The unit had a smash hit with the Razr phone in 2004 and 2005 but has been unable to produce an equally popular follow-up. However, Motorola last week announced that it had reversed a trend of declining sales and shipped 28.1 million cell phones in the second quarter.
Court Clears Remote-Storage DVR
A federal appeals court approved Cablevision Systems' rollout of a remote-storage digital video recorder system. In overturning a lower court ruling that had blocked the service, the U.S. Court of Appeals for the 2nd Circuit said the judge wrongly concluded that Cablevision, rather than its customers, would be making copies of programs, thereby violating copyright laws.
The next-generation technology would let cable subscribers with a digital cable box store TV shows on computer servers rather than on a hard drive in their home.
Blockbuster to Test Kiosks
Blockbuster and NCR will be putting out 50 automated kiosks that provide DVD rentals as a pilot program that could result in 10,000 kiosks within 18 months. Blockbuster and NCR, a maker of ATMs, have previously announced plans to deploy kiosks. They did not say where the first ones would be.
Several smaller companies, including McDonald's subsidiary Redbox Automated Retail, have deployed thousands of automated DVD rental kiosks in grocery stores, drug stores and McDonald's restaurants.
The Blockbuster-branded kiosks will initially provide only rentals but could in the future also sell DVDs and video games or accept downloads of new content.
T-bill rates rose. The discount rate on three-month Treasury bills auctioned yesterday rose to 1.710 percent from 1.695 percent last week. Rates on six-month bills rose to 1.920 percent from 1.880 percent. The annualized return to investors is 1.741 percent for three-month bills, with a $10,000 bill selling for $9,956.77, and 1.966 percent for a six-month bill selling for $9,902.93. Separately, the Federal Reserve said yesterday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 2.30 percent last week from 2.33 percent the previous week.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.