American Capital Forecloses on Collateral
American Capital, the publicly traded private-equity firm, said it foreclosed on collateral that Chairman Malon Wilkus put up to secure $5 million in loans that he used to buy the company's common stock.
The collateral was in the form of 1 million shares of company stock. Under the terms of the agreements, the foreclosures occurred automatically and the loans are extinguished.
"As the stock price declined in recent months, I used much of my personal resources to repay outstanding loans to the company and others, rather than selling the stock in which I so strongly believe. . . . Unfortunately, with the latest decline in our (net asset value) and stock price, I did not have the resources to protect the loans any further and the foreclosure occurred," Wilkus said in a statement.
Legg Mason Dumped SIVs, Focuses on Funds
Legg Mason dumped the last of the structured investment vehicles that plagued its money-market funds and will turn to improving the value of stock and bond funds that lost $135 billion to withdrawals last year. Legg Mason sold SIVs with a nominal value of $1.8 billion for 25 cents on the dollar, the Baltimore-based company said. Costs from the sale will reduce earnings in the current quarter by $367 million, or $2.59 a share.
Ciena to Cut 200 Jobs
Ciena, a Linthicum, Md., company that makes fiber-optic-network gear, said it is reducing its workforce by 200 employees, or 9 percent, and closing its research-and-development facility in Acton, Mass. It said those measures, as well as measures taken last quarter, will reduce adjusted quarterly operating expenses to about $80 million. They were $98.2 million in the quarter ended Dec. 31.
The company also said it doesn't expect much help from the Obama administration's plan to build broadband lines.
Phone companies are delaying expansions to wait out the economic slump, chief executive Gary Smith said. They will start investing again to cope with rising Internet traffic, Smith said, adding that he doesn't know when that will occur.
MiddleBrook Pharmaceuticals said lower drug revenue and higher expenses contributed to its fourth-quarter 2008 loss of $11.6 million, compared with a loss of $9.1 million in the fourth quarter of 2007. For the full year, the company lost $41.6 million, compared with a loss of $42.2 million in 2007. Revenue fell 42 percent, to $1.7 million in the quarter. Full-year revenue fell to $8.8 million from $10.5 million.
Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.