Michael Dell, 40. announced that he will be stepping down later this year as CEO of Round Rock-based Dell, Inc. . Kevin Rollins, Mr. Dell’s longtime partner in running Dell Inc., will take over as CEO of the computer company in mid-July while Mr. Dell will remain chairman of the board. This new arrangement is similar to the one that Microsoft Corp adopted in 2000, when Bill Gates became chairman and chief software architect and Steve Ballmer took over as CEO. Mr. Dell founded Dell in May 1984 when he was a 19-year-old just finishing his freshman year at the University of Texas at Austin. When the company went public four years later, Mr. Dell kept the titles of chairman and CEO.

As one would expect, the LA Times and the NY Times are all over the Walt Disney Company Board’s decision to remove Michael Eisner as chairman of Disney’s board, although he will remain as CEO for the time being. However, as usual, the Wall Street Journal‘s ($) coverage of the developments here, here and here is far superior.
What is ironic about this development is that it was spurred by Comcast‘s lowball takeover bid for Disney, which Mr. Eisner properly opposes and which has not gone well for Comcast (its stock price is down 10% since the takeover bid was announced). The bottom line is that the Disney board’s failure to develop a succession strategy for top management is coming back to haunt them at a critical time for Disney.

In a surprise to no one in the oil and gas industry, Royal Dutch/Shell Group‘s Board fired the company’s two top executives today in the wake of the company’s embarrassing announcement in January that it had significantly overestimated its oil and gas reserves.

This NY Times article addresses the government’s questionable accounting for its future Medicare and Social Security obligations, an issue addressed in this prior post here over this past weekend.

The Allen Brothers, who founded Houston in 1836, were real estate speculators. Almost since that time, Houston has been a hotbed of real estate development that has attracted a colorful collection of real estate speculators over the years.
No zoning laws and nominal barriers to entry into the real estate market are attributes that have traditionally made Houston an attractive venue for real estate development. On the other hand, Houston’s flat, sea level terrain has made development of Houston real estate challenging, particularly given its tendency to flood during Gulf Coast rainstorms.
As a result, one of the most eagerly anticipated events in Houston real estate circles is the Harris County Flood Control District‘s release of new flood plain maps for Houston real estate. On Monday, the Flood Control District will release preliminary new flood plain maps for five watersheds, including the Brays Bayou drainage area, which includes the flood-prone area around the Texas Medical Center. The flood plain designations have major impact on real estate development decisions and on plotting better ways to protect Houston from catastrophic flooding similar to what occurred in 2001 during Tropical Storm Allison. Within the so-called 100-year flood plain — the area with a theoretical risk of flooding once every 100 years — flood insurance is mandatory and the City of Houston imposes development requirements such as elevating buildings or digging detention ponds. These measures can substantially increase the cost of development.
The information to be released Monday is essentially an unofficial, draft version of the Federal Emergency Management Agency‘s Digital Flood Insurance Rate Maps, which are expected to be released in late spring. An appeals process will follow over the next several months before those maps become final. You can rest assured that many Houston real estate owners will be lobbying hard during that process regarding whether their property should be included within the flood plain.

This Minneapolis Star-Tribune article explains that, after 15 years of litigation, attorneys’ fees totaling $1.3 billion have been approved for the Minneapolis firm of Faegre & Benson and several dozen other law firms that represented 32,000 Alaskan fishermen and business owners who were harmed by the Exxon Valdez oil spill in 1989. Faegre & Benson was one of the lead law firms in involved in the lawsuit against Exxon Mobil Corp. which resulted in a 1994 award of $5 billion in punitive damages.
Although some practices of plaintiffs’ lawyers in large tort cases are open to valid criticism, plaintiffs’ lawyers are more often the unjust target of the demagouges of tort reform. The risk-taking and dedication of the type that the plaintiffs’ lawyers in the Exxon Valdez case exhibited are not often noted in the debate over tort reform. At considerable risk, these lawyers provided a valuable service to thousands of clients who otherwise would have had limited or no means to any legal recourse. These lawyers should be congratulated for a job well done.

A partnership controlled by Atlanta, Ga.-based real estate development firm Cousins Properties has submitted a $33 million cash offer to buy the 1,352 acre Heep Ranch property on I-35 between Austin and Buda, which is one of the most desirable commercial properties available in the fast growing Central Texas area. The offer is subject to Bankruptcy Court approval in the pending chapter 11 case of Hatsy Heep and husband David Shaffer.

This NY Times article and this Wall Street Journal ($) article describe the problems that The Walt Disney Co. board faces in dealing with the shareholder revolt against Chairman and CEO Michael D. Eisner. Although replacing Mr. Eisner would normally be an option after such a prolonged stretch of mediocre business performance, the recent lowball Comcast takeover bid for Disney is apparently helping Mr. Eisner among Disney board members, who are relunctant to make a change at the top in the face of such a bid. The board’s failure to have Disney management develop a succession strategy for replacing Mr. Eisner is highlighted by the awkward situation in which Disney currently finds itself.

This NY Times article describes the progress that Iraqi and American engineers and business executives have made in stabilizing and reviving Iraq’s cash-strapped and chronically underperforming oil and gas production. Iraqi officials and American advisers are attempting to revive this key Iraqi industry from one that Saddam Hussein’s government allowed to deteriorate from lack of investment and the looting of billions of dollars of oil sales while under United Nations sanctions after the 1991 Persian Gulf War. Iraq owns the third-largest oil reserves in the world (following Saudi Arabia and Canada), and its economy is almost solely reliant on revenue from oil exports. Accordingly, that revenue is a key component in financing Iraq’s economic revival.