All posts by Michelle Grathers

About Michelle Grathers

Michelle Grathers is an international tax expert. She has consulted for a variety of firms and high net worth individuals on all tax- and legal-related issues. She also helps new companies develop payroll services, statutory audits and mergers and acquisitions. Contact Michelle at michelle[at]businessdistrict.com

Cerberus Looking for Buyer for Gunmaker Bushmaster

Companies, , , , , , , ,

Investors in Cerberus Capital Management LP are pressuring the investment firm to unload their shares of Freedom Group, maker of the Bushmaster rifle, the weapon used to massacre 20 children and 6 adults in a Newtown elementary school last December.

The University of California stated that they do not want to be owners of companies that make weapons. The institution has an indirect investment of $1 million in Bushmaster via their much larger investment in a Cerberus private equity fund.

“We do not want to have investments in companies that sell, manufacturer or distribute firearms,” spokeswoman Dianne Klein said on Tuesday.

Other huge investors have stakes in Cerberus funds, including some of the country’s largest pension funds. The California State Teachers’ Retirement System announced after the Sandy Hook murders that it was going to review its holdings with Cerberus.

Not long after the shootings Cerberus said they were looking for a buyer for the Freedom Group. They hired an investment bank, Lazard Ltd. to help sell the company. Banking sources have said that major Wall Street companies are refusing to finance a bid for the Freedom Group.

Stephen Feinberg, founder and senior partner at Cerberus may bid for Bushmaster himself, together with a consortium of other senior partners from Cerberus. The move is considered a “stalking horse” offer which is a way to induce competition for the purchase of the Freedom Group, which is a collection of merged gun companies, including Bushmaster, which Cerberus bought in 2006. Freedom Group’s sales rose by 20 percent to $931.9 million in 2012.

Oracle Introducing Superfast Servers to Boost Hardware Business

Companies, Tech News, , , , ,
Larry Ellison
CEO Larry Ellison of Oracle Corp

In an effort to increase business in the hardware division of Oracle Corporation, Chief Executive Larry Ellison announced that the giant computer company will be offering a new line of faster servers for sale.

Ellison explained to journalists on Tuesday that the new “T5” microprocessors in Oracle’s latest line of servers have surpassed several performance peaks and have been able to run business databases and applications at speeds considerably quicker than with previous prototypes.

Ellison has been shifting Oracle’s focus on its hardware division ever since purchasing Sun Microsystems for $5.6 billion in 2010. Of special note is the high-end server equipment, especially the “SPARC” T5- and M5-powered servers and microchips which were showcased at the Redwood City, California event.

“When Oracle bought Sun, a lot of people thought the SPARC microprocessor was a real laggard and would never catch up. We’ve done better than catch up. We’ve caught up and passed the competition,” Ellison said.

Standard Chartered Posts Tenth Year Profits

Companies, ,
Chairman John Peace of Standard Chartered

Last year marked the tenth year in a row in which Standard Chartered, the London-listed bank, posted a net profit. Showing a profit of just over 1 percentage point in 2012 despite being hit with a large fine for dealing with Iran against the international sanctions placed on that country.

Standard Chartered inched out its black figure by riding on the wave of excellent expansion on the Asian scene.

The bank reported a pre-tax profit of $6.9 billion during 2012, just surpassing 2011 profits of $6.8 billion. The profits were a bit of an anti-climax considering the fact that analysts had forecast total pre-tax profits for Standard Chartered would reach $7 billion.

The bank has been riding high on strong growth in Asia, and said that it hired almost 2,000 new employees during 2012. They added that they expect to hire a similar number of new employees this coming year as well.

“Standard Chartered remains a growth story and we are sticking to our strategy, focusing on the basics of good banking, in markets we know well, with clients and customers with whom we have deep relationships,” Chairman John Peace said.

Blockbuster Owner Dish Planning Massive Layoffs

Communications, Companies, , , ,
Layoffs from Blockbuster on the Horizon

In an effort to improve profitability of the US-based video rental store Blockbuster, parent company Dish Network Corp is planning on closing down as many as 300 outlets across the country.

Dish just recently began administering Blockbuster, and would like to unload the unprofitable Blockbuster stores whose business model has been eroded by such online retailers as Amazon and download sites like Apple’s highly popular iTunes store. The closure of 300 stores would mean the laying off of as many as 3,000 workers, representing about 40 percent of Blockbuster’s total workforce of 7,300 in the United States.

“We continue to see value in the Blockbuster brand and we will continue to analyze store-level profitability and, as we have in the past, close unprofitable stores,” Dish said in a statement.

The exact locations of the outlets bound for the chopping block have not yet been revealed.

More Resignations From Best Buy’s Board

Companies, News, , ,
Best Buy Going Through Hard Times

Two board members of Best Buy Company announced their resignation from the struggling company’s board. The announcement comes within only seven months of the departure of Best Buy’s founder from the board.

The resignation of the two, which includes a former chief executive, will leave Best Buy’s 11-member board with four empty seats.

The company has been facing hard times as consumers use the electronic consumer goods stores as showrooms, and then go home and make their preferred purchases on-line.
The company said that G. Mike Mikan, who had served as the interim CEO from April to September 2012 had resigned from the board, effective immediately. Mikan was enlisted to fill in for the former head Brian Dunn who was forced to resign after having an inappropriate relationship with a woman employee.

Mikan will now become the president of ESL Investments, a hedge fund founded by billionaire Edward Lampert.

"Mike's background fits with our strategy and he will be a great asset to me and to ESL's portfolio companies," Lampert said in a statement on Monday.

The second departure will be when Matthew Paull retires in April, 2013 after serving on Best Buy’s board since 2008.

Paull and Mikan have not indicated that their resignations are related in any way to any disputes they may be having with the company’s management.

The fourth vacancy on the board goes back to last June when Rogelio Rebolledo was required to retire from the board due to his compliance with the rules of the company’s retirement policy.