In the Region
Venture capital fund to aid companies tied to 3 Md. schools
The New Markets Growth Fund, a $20 million venture capital fund at the University of Maryland's Robert H. Smith School of Business, said yesterday that it has started a program to provide $1 million in technical assistance to companies formed at, or formed based on technology from, the University of Maryland, College Park, University of Maryland, Baltimore and University of Maryland, Baltimore County.
Most of the companies that will receive funding, which will be matched by the Small Business Administration, will be based in the UMCP TAP Incubator, the UMB Technology Collaboration Center or the UMBC Research and Technology Park.
Net earnings decline 6.9% for Columbia-based REIT
Humphrey Hospitality Trust Inc. said yesterday that it posted second-quarter net earnings of $1.7 million, or 15 cents per diluted share, a 6.9 percent decline from its net earnings of $1.9 million, or 15 cents per share, a year earlier.
The Columbia-based self-advised real estate investment trust said its net earnings from continuing operations climbed to $1.4 million in the second quarter, $568,000 more than in the year-ago quarter, but the improvement was offset by a $697,000 reduction in gains from the sale of two hotels.
Union files motion for trustee to guide United Airlines
The Machinists union, claiming that United Airlines executives have lost employees' trust, filed a motion in U.S. Bankruptcy Court in Chicago yesterday asking a judge to appoint a trustee to oversee the airline's operations in bankruptcy.
Analysts say the Machinists' motion is not likely to succeed, but union officials say they hope it will result in United getting the proper leadership to bring the airline out of bankruptcy and return it to profitability.
The union's action comes a week after United's parent, UAL Corp., asked bankruptcy Judge Eugene Wedoff to give the airline the sole right to submit a plan to exit bankruptcy through Dec. 31. Currently, creditors aren't allowed - until Aug. 30 - to offer competing proposals.
The Los Angeles City Council approved yesterday an ordinance limiting "superstores," a move aimed at making it harder for Wal-Mart Stores Inc. to open stores that sell groceries along with merchandise such as clothes, toys and household goods.
The ordinance, approved by a 12-to-1 vote, will require retailers to submit economic impact studies before they can open such large stores in the city's economic revitalization areas.
Wal-Mart, the world's largest retailer, has faced increased opposition to its expansion plans in California. In April, voters in Inglewood, Calif., rejected a ballot initiative that would have allowed the retailer to open a store in that city over the objections of local officials.
Companies to spend more to meet new U.S. rules
U.S. companies with more than $5 billion in sales will spend an average of $8.1 million this year to meet new federal accounting rules, twice as much as forecast, according to a study released yesterday by a financial executives' group.
The companies will spend 73,312 hours of employee time and $4.4 million in consulting, audit and software fees to comply with the Sarbanes-Oxley Act, the study by Financial Executives International said. The organization represents chief financial officers and treasurers.
The law, which tightens financial reporting, was passed in 2002 after investors lost about $300 billion in share value in corporate accounting scandals.
Gold Fields agrees to buy Iamgold in stock swap
Gold Fields Ltd., the world's No. 4 gold producer, agreed to buy Iamgold Corp. in a $2.1 billion stock swap, limiting its vulnerability to gains in South Africa's rand and helping the Canadian company stymie a hostile bid.
Gold Fields would combine its mines outside South Africa with Iamgold's assets in a new company based in Denver and chaired by former Newmont Mining Corp. Chief Executive Officer Gordon Parker. Iamgold will issue 351.7 million shares to gain a 30 percent stake, and CEO Joseph Conway will resign.
The plan might help Gold Fields boost the value of its international properties. The rand's 94 percent gain against the U.S. dollar since 2001 has cut profit in South Africa, and the company faces a legal order to sell a quarter of its domestic mines to black investors. It also fulfills Conway's goal of making Iamgold big enough to compete for acquisitions, while trumping Golden Star Resources Ltd.'s hostile offer.
Cracker Barrel sued in discrimination claim
Cracker Barrel Old Country Store Inc., which has restaurants in 41 states, was sued by the government yesterday over claims it discriminated against female and black employees at three Illinois restaurants.
The suit, filed in federal court in Chicago by the Equal Employment Opportunity Commission, was based on complaints by 10 workers at Cracker Barrel restaurants. The suit claims that women were subjected to sexual assaults, and a black employee suffered disparaging remarks about his race.
Cracker Barrel, which in May settled Justice Department claims that it discriminated against black customers in 50 restaurants in the South, denied that it discriminates against its workers.
Former Lipper executive pleads guilty in fraud case
The former executive vice president of Lipper Holdings LLC pleaded guilty in New York yesterday to federal charges that he overstated the value of two hedge funds by almost $340 million.
Edward Strafaci, who also was Lipper's director of fixed-income money management, was accused of orchestrating a six-year scheme to cheat investors in two funds, Lipper Convertibles and Lipper Convertibles Series II. He pleaded guilty to securities fraud and admitted overstating the funds' value.
The charges are part of a recent pattern of allegations of wrongdoing at hedge funds, which are loosely regulated private partnerships open to affluent institutions and individuals. Hedge funds, estimated to have $500 billion in assets, use higher-risk techniques than traditional funds, such as buying shares with borrowed money.
Ex-employees of BNP admit to theft from bank
Two former BNP Paribas SA employees have admitted they tried to steal more than $12 million from the bank over a period of almost three years.
Edward Canale, former head of the Paris-based bank's asset workout group, and a subordinate, Michael Connolly, pleaded guilty to attempted grand larceny in the first degree, Manhattan District Attorney Robert Morgenthau said.
In April, Paris-based BNP said the district attorney was investigating irregularities uncovered during a January internal audit at the bank's asset workout group, which deals with securities of distressed and bankrupt companies.
Tellabs reviewing its deal for Advanced Fibre
Tellabs Inc., which makes equipment for the main backbone of telephone networks, is reviewing its $1.82 billion acquisition of Advanced Fibre Communications Inc. after Advanced Fibre said second-quarter profit fell 72 percent.
Tellabs' board requested a "further review and analysis of AFC's business and financial outlook" after Advanced Fibre reported second-quarter net income that fell to $921,000 from $3.33 million a year ago, Tellabs said in a filing with the U.S. Securities and Exchange Commission.
Advanced Fibre's second-quarter results fueled speculation that Tellabs will renegotiate the terms of the purchase, Legg Mason Wood Walker analyst Timm Bechter told clients last week. Tellabs' stock-and-cash offer was 19 percent more than Advanced Fibre's closing share price Tuesday.
This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.