Daily Archives: November 15, 2005

Settled again, with an assist from Dow Jones

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mike price4.jpgLast time we checked in with University of Texas at El Paso head football coach Mike Price, the former University of Alabama head coach (for about five minutes) was settling his $20 million libel lawsuit against Time, Inc.
Well, as you might have heard, Time backed off of that settlement a few days after its announcement. Time contended indignantly that Coach Price and his attorney had breached the settlement agreement by making public comments about the settlement and the litigation. Coach Price and his lawyer denied that any of their statements breached the agreement, Time went ahead and filed a motion with the Alabama state court requesting that the settlement be set aside, anyway.
Enter Dow Jones, Inc., venerable publisher of The Wall Street Journal. Dow Jones filed a motion with the court in the Price v. Time lawsuit requesting that the court unseal the terms of the defunct settlement and other records in the case, which included information regarding the identity of Time’s sources for what went on in Coach Price’s hotel room that summer evening in Pensacola. Time apparently said “Oops!” and promptly opposed Dow Jones’ request.
Regaining its senses, Time announced today that it had once again settled with Coach Price, which apparently moots the Dow Jones motion in the court’s view. This time, Coach Price and his attorney could not be reached for comment on the settlement, thank goodness.
However, Coach Price has arranged for a several sideline passes to UTEP’s next game to be held at the will-call window for Dow Jones. ;^)

J&J and Guidant settle

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guidant_logo_web2.jpgJohnson & Johnson and Guidant Corp. announced a revised acquisition deal this morning that values Guidant at $21.5 billion, about $4 billion lower than the original price, and settles the companies’ lawsuit over J&J’s decision to walk away from the previous deal because of a material adverse effect on Guidant’s financial condition.
No word yet on how much of that $4 billion will make it into the “Spitzer for Governor” campaign war chest. ;^)

The best defense is a good offense

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Refco Logo8.jpgThomas H. Lee Partners, Ltd is the private equity firm that bought a big stake in Refco, Inc. last year and held a 38% equity stake in the company after Refco went public in August of this year. With Refco’s recent descent into bankruptcy, that equity stake is now worthless.
Notwithstanding that rather disappointing investment, Thomas H. Lee Partners is a defendant along with former Refco CEO Phillip Bennett and several other Refco executives and consulting firms in several civil lawsuits by investors seeking substantial damages that have been filed since the revelations about Mr. Bennett’s short-term lending arrangement between Refco and one of his personal investment companies. More lawsuits over its involvement with Refco and Mr. Bennett are almost a certainly for Thomas H. Lee Partners.
So, having made this stupendously bad investment and getting sued out the gazoo to boot, what should Thomas H Lee Partners do to defend itself? Well, how about go on the offensive?

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Life after Hank

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Greenberg13.jpgCouldn’t help but notice that American International Group Inc. announced yesterday that its third-quarter net income fell 36% to $1.72 billion (65 cents a share) as a result of recent large catastrophe losses. This comes on the heels of the announcement from last week that AIG would restate its results dating to 2002 to correct errors in the way it accounted for certain types of derivatives contracts, which restatement came only six months after AIG had completed an earlier restatement for the same periods. Just to make matters as murky as possible, AIG also also announced yesterday that it had revised its results for 2000 and 2001.
Inasmuch as yesterday’s earnings announcements were in line with forecasts and came after the close of trading, they did not have much of an impact on trading. AIG’s shares increased 26 cents to $67.50 in regular trading yesterday and, in after-hours trading, the shares dropped 30 cents to $67.20. The stock hit a 52-week low of $49.91 this past spring during the period in which the company restated five years of results and cut shareholder’s equity by $2.26 billion as New York AG Eliot Spitzer sparred with former AIG CEO, Maurice “Hank” Greenberg. For the first nine months of this year, AIG’s profits were $10.02 billion ($3.82 a share), which is up from its restated (twice) profit of $8.3 billion ($3.14 a share) for the first nine months of 2004.

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