| …after criticism from the Obama administration said that such jets aren't "the best use of money at this point"… |
Tuesday, 27 January 2009
Citigroup Not Purchasing New Corporate Jet...
Posted on 15:13 by Unknown
Saturday, 24 January 2009
Thursday, 22 January 2009
Obama's Nominee for Treasury Secretary Misfiled His Taxes Using TurboTax
Posted on 11:24 by Unknown
| Timothy Geithner, president of the New York Federal Reserve, is Obama's choice for Treasury Secretary - which oversees the IRS. Both Republican and Democratic congressmen like his background but, he has been put in the hot seat because he messed up his taxes several years ago, and had to pay penalties. The interesting thing is that, even though he is a financial big shot, he did his taxes himself, using off-the-shelf TurboTax. Personally, I think messing up on your taxes and then overseeing the IRS can be a good thing, if it motivates him to push for simplifying taxes. |
Tuesday, 20 January 2009
Never Work a Day in Your Life Again
Posted on 12:54 by Unknown
Nice post about finding your dream job...
Sand Sculpture of Barack Obama in Puri, India
Posted on 10:43 by Unknown
Tribune Bankruptcy Restructuring: Company Wants To Stay Together
Posted on 10:32 by Unknown
Last month, I wrote about how the Tribune Company filed for Chapter 11 bankruptcy protection.
Now, as the company starts to plan its reorganization, the complication is that the Tribune wants to retain all its assets, while keeping its unusual corporate structure (S-corp owned by an ESOP).
The Tribune wants to keep its media assets (Chicago Tribune, Los Angeles Times, WGN TV, etc.) because executives feel they are worth more together, than chopped up and sold at distressed prices. The Tribune does, however, still plan to sell the Chicago Cubs and Wrigley Field.
At the same time, the Tribune wants to stay an S-corp owned by its employees (ESOP). Unlike a regular C corporation, an S-corp allows all income to be passed through to the owners. Since the owner (ESOP) is organized as a tax-exempt qualified retirement plan, this allows the Tribune to avoid all taxes.
Retaining the ability to avoid income tax is viewed as an important part of any recovery.
Keeping the S-corp structure complicates restructuring their $13 billion debt load because Tribune creditors such as JPMorgan Chase, Citigroup, and Bank of America can't be given equity in exchange for debt reductions.
An S-corp is limited to 100 owners - who must be individuals, and not other corporations. (The ESOP, representing thousands of employees, counts as one individual owner).
A possible solution is to offer the creditors some type of debt instrument that does not pay interest, but has a value pegged to the stock, so that the creditors would participate in any upside.
At least one bankruptcy expert, however, thinks that the lenders would be too risk averse to accept a security like this because the IRS will probably challenge it.
The one thing in the Tribune's favor is time to work out this situation because the creditors do not have right to demand interest payments (Due to this deal being done during the era of loose lending practices, and banks fighting over it).
All the Tribune needs is enough funds to continue operations. This is covered because their newspapers and TV stations should still generate $500 million dollars. They also got a $50 million letter of credit and a $300 million loan against receivables from Barclays.
Now, as the company starts to plan its reorganization, the complication is that the Tribune wants to retain all its assets, while keeping its unusual corporate structure (S-corp owned by an ESOP).
The Tribune wants to keep its media assets (Chicago Tribune, Los Angeles Times, WGN TV, etc.) because executives feel they are worth more together, than chopped up and sold at distressed prices. The Tribune does, however, still plan to sell the Chicago Cubs and Wrigley Field.
At the same time, the Tribune wants to stay an S-corp owned by its employees (ESOP). Unlike a regular C corporation, an S-corp allows all income to be passed through to the owners. Since the owner (ESOP) is organized as a tax-exempt qualified retirement plan, this allows the Tribune to avoid all taxes.
Retaining the ability to avoid income tax is viewed as an important part of any recovery.
Keeping the S-corp structure complicates restructuring their $13 billion debt load because Tribune creditors such as JPMorgan Chase, Citigroup, and Bank of America can't be given equity in exchange for debt reductions.
An S-corp is limited to 100 owners - who must be individuals, and not other corporations. (The ESOP, representing thousands of employees, counts as one individual owner).
A possible solution is to offer the creditors some type of debt instrument that does not pay interest, but has a value pegged to the stock, so that the creditors would participate in any upside.
At least one bankruptcy expert, however, thinks that the lenders would be too risk averse to accept a security like this because the IRS will probably challenge it.
The one thing in the Tribune's favor is time to work out this situation because the creditors do not have right to demand interest payments (Due to this deal being done during the era of loose lending practices, and banks fighting over it).
All the Tribune needs is enough funds to continue operations. This is covered because their newspapers and TV stations should still generate $500 million dollars. They also got a $50 million letter of credit and a $300 million loan against receivables from Barclays.
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