Home Retailer Accepts Buyout
Linens 'n Things, the second-largest U.S. home furnishings retailer, agreed to a $1.3 billion buyout by a group led by Apollo Management after struggling to compete with Bed Bath & Beyond. Apollo and its partners will pay $28 a share, Linens 'n Things said. The Clifton, N.J.-based company has 516 stores, mostly in strip malls.
The retailer has posted losses or profit declines in the past seven quarters as customers defected to Target and Bed Bath & Beyond, the largest U.S. home furnishings chain. Private equity firms including Leon Black's Apollo are buying retailers to turn around their operations and capitalize on their nameplates and real estate.
Bank to Settle Federal Probes
Bank of New York said it will pay $38 million in an agreement with the U.S. attorney's offices in Manhattan and Brooklyn, which have been investigating the role of the company's employees in questionable funds transfers and an alleged scheme by a former bank customer.
Bank of New York said the agreement outlines a series of measures for the company to improve its procedures for monitoring and reporting suspicious activity. The company also agreed to pay restitution and forfeiture totaling $38 million, all of which it has previously set aside.
The U.S. attorney in Manhattan has been investigating funds transfers in certain accounts at the bank, primarily involving wire transfers from Russia from 1996 to 1999. The U.S. attorney in Brooklyn has been investigating actions by bank employees that may have facilitated an alleged fraudulent scheme by a former customer of one of the bank's Long Island branch offices.
Approval Sought for Bonuses
Collins & Aikman, a supplier of automotive interiors that is under bankruptcy protection, is seeking court approval to pay as much as $44.5 million in bonuses to encourage more than 200 employees to stay with the company while it restructures.
Collins & Aikman proposes to make up to $9.5 million in retention bonuses to 220 employees, including members of senior management. Collins & Aikman also wants court approval to pay up to $35 million more in connection with the value of the company at the end of its bankruptcy case or the value of a sale transaction.
The bonuses would ensure employees stay with the company for the remainder of the reorganization, Collins & Aikman said in court papers. About 300 employees, including senior management and plant managers, have left since it filed for bankruptcy protection in May.
Workers Win Ruling on Pay
The Supreme Court ruled that companies must pay plant workers for the time it takes to change into protective clothing and safety gear and walk to their workstations. The court said that employers must pay wages for the donning of "integral" gear and the time it takes workers to then walk to the production area.
The court, in a unanimous ruling authored by Justice John Paul Stevens, upheld a decision of the U.S. Court of Appeals for the 9th Circuit in favor of workers at a meat processing plant in Pasco, Wash.
Blockbuster's Loss Narrows
Blockbuster posted a $491.4 million third-quarter loss, compared with a loss of $1.41 billion in the comparable period a year earlier. The elimination of most late fees continued to chip away at revenue, and growth of the company's online service stalled.
In a filing with the Securities and Exchange Commission, Blockbuster said that "a very large majority" of its assets are already pledged as collateral on loans and that trade creditors were imposing stricter terms. The company said it could be forced into bankruptcy protection if a new credit agreement with lenders does not become effective or if lenders recall loans because of failure to meet debt covenants.
MBIA, the world's largest bond insurer, said its third-quarter profit fell as it recorded $75 million in charges to cover a potential settlement with regulators over an investigation into reinsurance agreements. The Armonk, N.Y.-based company earned $141.8 million in the third quarter, down 23 percent. MBIA announced it will restate earnings dating back to 1998 to account for the settlement.
Dynegy said its third-quarter profit after paying preferred dividends slid 68 percent in the three months ended Sept. 30, to $23 million from $72 million. But results topped Wall Street expectations, and the energy company raised its full-year 2005 forecast. Revenue totaled $770 million, up from $668 million.
Visteon said it narrowed its third-quarter loss to $200 million from $1.4 billion. The struggling auto-parts maker recently closed on a bailout plan with its former parent Ford Motor. Sales were down $15 million, to $4.1 billion.
Compiled from staff and news service reports.