Financial Mines

With the sun shining, temperatures locked in the mid 40s, it’s a beautiful day here in the Nutmeg State. Too bad, the economic news couldn’t keep up.

Challenger, Gray & Christmas said announced layoffs in December were about 41,000, which was slightly lower than the monthly average in 2011. But the company, an outplacement firm for corporations that tracks the job market, said a total of 606,082 job cuts were announced last year, a 14 percent increase over the 529,973 in 2010.

The government sector lead all sectors in cuts, but aerospace and finance were among the biggest losers last year.

The IMF also predicted smaller growth for the world economy in 2012.

And, in the news category of insult to injury, the Special Inspector General to TARP, said federal regulators approved millions in bonuses and pay for executives of companies that needed government funding to survive.

The market appeared to be gamely fighting off the bad news, with the S&P down just 3 points.

Norwalk-based Priceline.com’s new ad in which long-time pitchman and everyone’s favorite starship captain Will Shatner dies in a fiery bus crash, did not amuse the American Bus Association.

In a press release, the ABA said depicting Shatner’s character, the Priceline Negotiator, dying in a fiery bus crash is in very poor taste.

Dan Ronan, a spokesman for the ABA, said via phone that it’s unacceptable and asked rhetorically what kind of reaction Priceline would have gotten if it used another form of mass transit.

“We’re the second biggest form of transportation in the nation,” he said. “We carry 726 million passengers a year, second only to the airlines.”

The ABA wants Priceline to remove the spot and to have its CEO and Shatner take  bus trip to prove how safe it is to travel by bus.

Brian Ek, a Priceline spokesman, declined to comment on the ABA’s concerns.

Shatner has been priceline.com’s celebrity spokesman for 14 years, and remains under contract to the company, the Norwalk business said.  In a press release announcing the change in its marketing, Priceline  said killing Shatner’s character will help focus consumers’ attention on other aspects of its business, particularly the  published-price hotel service, the fastest-growing segment of priceline.com’s hotel business.

Shares of Priceline were trading at $518.59.

Stamford-based Diamondback Capital Management might well be able to put an insider trading scandal behind it, settling civil allegations on Monday and escaping any criminal charges from the Department of Justice.

The hedge fund, in a letter to investors, said it is moving forward with business after the  U.S. Attorney for the Southern District of New York,  resolved the investigation into the matter without any criminal charges and following an SEC settlement.

The U.S. Attorney and Diamondback revealed that an outside review of Diamondback’s operations that documented violations of the companies policies provided key information for the government as it pursued this insider trading case involving Dell and Nvidia Corp. stock. Former employees of Diamondback and Level Global have been implicated with others in the alleged conspiracy.

Diamondback said this closed the door on the investigation while noting all payments as a result of the SEC settlement will come from the firm and not investors.

The SEC announced Monday Diamondback agreed to pay more than $9 million to settle insider trading charges against it.

According to the SEC, Diamondback will give up more than $6 million of “allegedly ill-gotten gains” from the deal. It will also pay a $3 million fine.

The settlement is subject to the approval of Judge Paul G. Gardephe of the U.S. District Court for the Southern District of New York.

Just four months after the last one, Derecktor Connecticut is back in bankruptcy, having filed another Chapter 11 case on Friday.

According to the court documents, Derecktor, which was operating at 535 Seaview Ave., has more than 200 creditors and liabilities of $1 million to $10 million. The Bridgeport Port Authority is one of the top creditors holding an unsecured claim of $327,954.11, the filing said.

The BPA is Derecktor’s landlord.

Derecktor posted a press release on its Facebook page over the weekend, and noted this case does not affect its two other yards in New York and Florida. And the boat maker said it is seeking investors to keep the Bridgeport yard going.

According to Derecktor Shipyard’s Facebook page, it has filed for Chapter 11 Bankruptcy protection for its Bridgeport operation, again.

The company says, the filing does not affect its New York and Florida operations, and the boat maker said it is actively looking for investors to keep the Bridgeport yard open.

A search of the federal court online dockets did not find a new bankruptcy filing for Derecktor, though the firm is facing another civil lawsuit, filed Jan. 10, 2012 by a contractor who says it was never paid for work on Derecktor’s drydock.

If the filing does go forward, it will come just slightly more than four months after the yard’s last bankruptcy and as it faces several lawsuits, including one filed by its last, biggest client, Cakewalk V, which seeks millions of dollars.

An email seeking comment Saturday was not immediately returned.

Officially, the yard blamed its troubles on a difficult economy and on its investment in building out the Bridgeport yard. The company also received millions in assistance from the State of Connecticut for cleaning up the site on Seaview Avenue.

We expect to hear more on this as Derecktor employed more that 250 at one time.

This is a copy of the announcement:

Bridgeport, CT – 1/20/2012

For immediate release

Derecktor Shipyards Conn. LLC, based in Bridgeport, CT, announced today that it is seeking protection under the Chapter 11 bankruptcy and reorganization laws. A depressed economy, the cash drain of investment made in building out the Bridgeport facility, and a recent lack of new construction opportunities, have put a tremendous strain on the company’s finances. The shipyard is seeking strategic alternatives, including an investor or buyer of the yard.

The Bridgeport yard’s location and capabilities made it very competitive for both yacht and commercial new construction, as well as service and refit projects, during stronger economic times. A significant success was the construction and delivery in 2009 of the 39 meter offshore terminal supply tug Independence. The company’s most recent accomplishment was the construction and delivery in 2010 of m/y Cakewalk V – the largest private yacht built in the United States since 1930 and, at 85 meters and 2,998 tons, a masterpiece of engineering, design and craftsmanship. See our website at www.derecktor.com for additional information.

Separately, Robert E. Derecktor, Inc. and Derecktor of Florida, Inc. are completely unaffected by the events in Bridgeport.

Robert E. Derecktor, Inc., located in Mamaroneck, NY, is currently working on approximately 40 boats in for winter storage, and has several yacht and commercial re-fit projects underway. Personnel are also engaged in off-site millwork projects and the outfitting of Presto series sailboats. The Mamaroneck yard continues to offer the same custom new construction skill-sets for which it has become famous.

Derecktor of Florida, located in Dania Beach, FL, has had very strong growth in yacht repair and re-fit revenues in 2011, up almost 30% over the prior year. Building on this momentum, the company is investing in a major upgrade of it’s hauling/transfer capabilities and electrical infrastructure in 2012. The yard remains dedicated to providing outstanding service and refit offerings to the global mega-yacht community.

For additional information, please contact James Brewer, Director of Sales and Marketing, at jamesb@derecktor.com.

Here’s the link to the Derecktor Facebook announcement:

http://on.fb.me/z0Dkxt

While touting a record breaking year for its industrial division and improved operating profit net EPS was 35 cents in the fourth quarter. That’s 17 percent lower than the fourth quarter of 2010 when EPS was 42 cents.
Revenue, at $38 billion wet 8 percent lower than a year ago.
GE Capital earned $1.6 billion, up 58 percent for the quarter, with pre-tax earnings of $1.8 billion, up 89 percent. Industrial orders of $28.6 billion set a record at the company.

Northeast Utilities and NSTAR bowed to regulators’ demands and submitted an application for approval of their merger to the Connecticut Utilities Regulatory Authority.

PURA originally did what gamblers do when they don’t want to bet a round, it  checked.

But after the massive outcry and complaints about the NU’s oversight of its electricity distribution company during storms in the fall, PURA ruled the two companies have to submit to a review.

“Although we disagree with PURA’s reversal of its prior rulings on jurisdiction, we are confident the Authority will see the benefit that will come to Connecticut through the combination of our businesses,” Gregory B. Butler, NUs’ senior vice president and general counsel, said in a press release.

The companies announced the deal, with a maximum value of $4.6 billion in 2010. Shareholders and boards have signed off on the deal, but state regulators are still looking it over.

There might be some concern that NU will not be able to finish the review in time to meet deadlines for the merger, but the two corporations are going through a similar process in Massachusetts, which could help them prepare for Connecticut.

Shares of NU fell 59 cents to $33.53  while NSTAR shares were off 73 cents to $43.22 in Thursday trading in New York.

Gene Guilford, president and CEO of the Independent Connecticut Petroleum Association has brought this bill to our attention: HR 3784.

Democrats are looking to create a Presidential appointed panel to regulate profits of oil companies.

At a time when demand for gasoline is down but prices remain stubbornly high, U.S. Rep. Dennis Kucinich, D-Ohio, and five others have sponsored the Gas Price Spike Act of 2012 that would slap an excise tax in proportion to a windfall profits companies receive.

To determine a windfall, the act would create a Reasonable Profits Board…

It’s not an unfamiliar concept here. U.S. Sen. Richard Blumenthal, D-Conn., once championed a similar tax on electricity companies back in 2006 when he was AG.

One question I have, is what do they measure the price of oil against? For example, in the real world, is a barrel of oil worth more or less than an ounce of gold?

The bill has been sent to Ways and Means.

Here’s a link to the text in Thomas.

http://1.usa.gov/yowC5u