The amazing Cubs

The Chicago Cubs Baseball Club has always been considered somewhat of a lovable laughingstock around Chicago. Consequently, although the club’s swoon in this past baseball season’s National League Wild Card playoff race did not sit particularly well with Cubs fans, it was at least expected.
But according to this scathing Jay Mariotti Chicago Sun-Times article, the legendary incompetence of Cubs management may have risen to heretofore unforseen levels. Consider this snippet:

We understand the Cubs have a feeble, hapless Charlie Brown existence. We know they’re battling farm animals, perpetual paranoia and turtleneck-choked fans. But if they’re also so internally incompetent that they employ an unlicensed head trainer, who was ratted out by the assistant trainer just months after they fired the previous head trainer, then riddle me this, Ronnie Woo-Woo:
How are they supposed to win a World Series in our lifetime? When management is appointing alleged quacks to heal injuries on a team that lost Mark Prior, Kerry Wood and too many other players to the most mysterious disabled list I’ve seen in sports — remember the sneeze that toppled Sammy Sosa? — isn’t it time to dismiss the cause as hopeless and move on to junk bonds as a hobby?

Read on.

Death in Texas

Sister Helen Prejean is a member of the Sisters of St. Joseph of Medaille in Louisiana. She is America’s leading abolitionist with regard to the death penalty and the author of Dead Man Walking, which was made into one of the best movies about the death penalty.
In the most recent issue of the New York Review of Books, this article is adapted from Sister Prejean’s new book, The Death of Innocents: An Eyewitness Account of Wrongful Executions that Random House is releasing next month. Sister Prejean sharply criticizes then-Governor George Bush’s denials of clemency to a large number of Texas death row defendants in Texas, noting that he distanced “himself from his legal and moral responsibility for executions.” The entire article is compelling reading, as the following excerpt reflects:

George W. Bush during his six years as governor of Texas presided over 152 executions, more than any other governor in the recent history of the United States. Bush has said: “I take every death penalty case seriously and review each case carefully…. Each case is major because each case is life or death.” In his autobiography, A Charge to Keep (1999), he wrote, “For every death penalty case, [legal counsel] brief[s] me thoroughly, reviews the arguments made by the prosecution and the defense, raises any doubts or problems or questions.” Bush called this a “fail-safe” method for ensuring “due process” and certainty of guilt.
He might have succeeded in bequeathing to history this image of himself as a scrupulously fair-minded governor if the journalist Alan Berlow had not used the Public Information Act to gain access to fifty-seven confidential death penalty memos that Bush’s legal counsel, Alberto R. Gonzales, whom President Bush has recently nominated to be attorney general of the United States, presented to him, usually on the very day of execution.[1] The reports Gonzales presented could not be more cursory. Take, for example, the case of Terry Washington, a mentally retarded man of thirty-three with the communication skills of a seven-year-old. Washington’s plea for clemency came before Governor Bush on the morning of May 6, 1997. After a thirty-minute briefing by Gonzales, Bush checked “Deny” ? just as he had denied twenty-nine other pleas for clemency in his first twenty-eight months as governor.
But Washington’s plea for clemency raised substantial issues, which called for thoughtful, fair-minded consideration, not the least of which was the fact that Washington’s mental handicap had never been presented to the jury that condemned him to death. Gonzales’s legal summary, however, omitted any mention of Washington’s mental limitations as well as the fact that his trial lawyer had failed to enlist the help of a mental health expert to testify on his client’s behalf. When Washington’s postconviction lawyers took on his defense, they researched deeply into his childhood and came up with horrifying evidence of abuse. Terry Washington, along with his ten siblings, had been beaten regularly with whips, water hoses, extension cords, wire hangers, and fan belts. This was mitigation of the strongest kind, but Washington’s jury never heard it. Nor is there any evidence that Gonzales told Bush about it.

The article concludes with the following observation:

As governor, Bush certainly did not stand apart in his routine refusal to deny clemency to death row petitioners, but what does set him apart is the sheer number of executions over which he has presided. Callous indifference to human suffering may also set Bush apart. He may be the only government official to mock a condemned person’s plea for mercy, then lie about it afterward, claiming humane feelings he never felt. On the contrary, it seems that Bush is comfortable with using violent solutions to solve troublesome social and political realities.

Read the entire article.

Medical Center notes 50 year anniversary of first transplant operation

On the anniversary of the first kidney transplant in Boston 50 years ago, Eric Berger of the Chronicle does a fine job in this article of reviewing the accomplishments of Houston’s Texas Medical Center doctors in contributing to the advancement of transplant procedures. Inasmuch as the Chronicle does not maintain online links to many of its articles for very long, check it out soon.

Update on Landry’s acquisition search

Following on this earlier post regarding Houston-based restaurant company Landry’s search for acquisition targets, the Chronicle reports that the company’s target is probably a Las Vegas casino and not the Stros.
Landry ‘s is a national restaurant company that owns and operates 300 restaurants, including Joe’s Crab Shack, Rainforest Cafe and Landry’s Seafood House. Landry’s CEO Tilman Fertitta, who founded the company and controls about a quarter of the company’s outstanding stock, is the cousin of the Fertitta family that runs Station Casinos Inc., so the gaming industry is already in the Fertitta family.
What’s particularly interesting is that Landry’s is dipping into the junk bond market to fund its venture into the gaming industry. Last week, Landry’s priced its inaugural $450 million speculative-grade issue in the high-yield market last Wednesday, and the resulting 7.50% rate for the offering of senior notes due in 2014 was about 50 basis points more than Landry’s would have had to offer if it had a track record in the high-yield market. Nevertheless, wWith that kind of yield, Landry’s bond offering received a warm reception in the high-yield junk bond market.
Landry’s will use $300 million of the unrestricted proceeds of the offering to pursue its new acquisition and the remaining $150 million for restaurant operations. If Landry’s makes a deal for a casino, it is likely that it would return to the junk bond market for additional financing.
In addition to its junk bond financing, Landry’s is also arranging a new $450 million credit facility, which consists of a $300 million revolving credit facility and a $150 million term loan.
Finance market analysts are cautious with regard to Landry’s financing moves. Standard & Poor’s Ratings Services assigned its ‘BB-‘ rating and a ‘2’ recovery rating to the $450 million credit facility, which means that the expectation is that there would be an 80-100% chance of recovering principal in the event that Landry defaults on the loan. S&P also issued a ‘B’ rating to Landry’s $400 million junk bond offering, and an overall ‘BB-‘ corporate credit rating with a negative outlook.
S&P assigned the junk bond offering a rating two levels below the corporate credit rating because the junk bonds are subordinate to the of substantial amount of priority debt in Landry’s capital structure. S&P provided the following cautionary comment on Landry’s:

The ratings reflect Landry ‘s participation in the highly competitive casual dining sector of the restaurant industry, its growth-through-acquisition strategy, the inherent difficulties in operating multiple concepts, a very aggressive financial policy, and the high leverage that results from the recapitalization. These risks are only partially offset by the company’s established presence in the causal seafood dining sector of the restaurant industry, good locations for its restaurants, and adequate financial flexibility.

Updating the Yukos case — Rosneft buys Yugansk unit

Russian oil company OAO Rosneft announced today that it has acquired Baikal Finance Group, the purchaser of OAO Yukos‘ main production unit Yuganskneftegaz (“Yugansk”) at a Russian government auction last Sunday. Here are the earlier posts covering the auction and the Yukos chapter 11 case.
The Russian government controls Rosneft, so the company’s acquisition of the Yugansk unit gives the Russian government effective control over a substantial portion of the Russian oil and gas industry. Yukos believes that the Rosneft acquisition is preliminary to the ultimate transfer of the Yugansk unit to Russian government-controlled OAO Gazprom. Gazprom was expected to be the primary bidder at the auction until the U.S. Bankruptcy Court in Houston issued a TRO late last Thursday in Yukos’ chapter 11 case that chilled Western financial institutions that were scheduled to provide financing for Gazprom’s bid. When Gazprom could not finance its anticpated bid for Yugansk, Baikal Finance stepped into the breach and emerged on Sunday as the winning bidder at the auction by posting a $9.37 billion bid.
Gazprom and Rosneft announced a merger this past September, and many analysts of the Russian economy expect that the Russian government will use Gazprom as the vehicle to create Russia’s major oil and gas company. Before Gazprom’s bid was undermined by the TRO, Rosneft was expected to become part of Gazprom’s new oil subsidiary — OOO Gazpromneft — and Yugansk was to be merged into that unit.
Adding to the quickly changing events of the past week, Gazprom earlier this week announced that it had sold the Gazpromneft unit last Friday to an unidentified buyer for an undisclosed sum. Gazpromneft took part in the auction on Sunday, but did not bid.
Meanwhile, Yukos announced in a Bankruptcy Court hearing in Houston on Wednesday that it is preparing a massive lawsuit against all parties that participated in the auction in violation of the Bankruptcy Court’s TRO. In that regard, Yukos accused Gazprom of violating the Bankruptcy Court’s TRO by participating — although not bidding — in the auction of the Yugansk unit.
In rattling this litigation saber, Yukos is clearly signaling that it will attempt to put the assets of Gazprom and any Western financial institution that participated in the auction at risk. In so doing, Yukos is attempting to gain some leverage in its battle with the Russian government by chilling the market for Western financing of the Russian companies’ oil and gas ventures. It is a creative strategy, but it is far too early to predict whether it will have any meaningful impact on the Russian government’s conduct toward Yukos and the rest of the Russian oil and gas industry.