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Sunday, September 25, 2005

Hurricane Katrina has rekindled debate over the controversial Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, in the U.S. House of Represenatives. Congressional Democrats feel that among the hundreds of thousands of victims of Katrina, many of whom have lost all their possessions and are coping with relocation, those that declare bankruptcy should be granted the protections of the previous law. 32 Democrats have sponsored a proposal that would delay implementing certain parts of the law to “insure that we do not compound a natural disaster with a man made financial disaster.”

The new bankruptcy law affects anyone whose income (as of the six months before filing) was over the state median income. Democratic legislators point out that many hurricane victims who manage to find work will be suffering from wage reductions, making them unable to effectively deal with their previous debts. Among U.S. states, Louisana and Mississippi have the fourth and third lowest median incomes, respectively. Democrats also feel that it is unfair to require repayment by bankrupted Hurricane Katrina victims while citizens in other states with similar incomes would pay nothing.

F. James Sensenbrenner, Republican from Wisconsin and chairman of the House Judiciary Committee, has denied a hearing on creating an exception in the law for the purposes of Katrina relief. He noted that “If someone in Katrina is down and out, and has no possibility of being able to repay 40 percent or more of their debts, then the new bankruptcy law doesn’t apply.”

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 has been heavily criticized by consumer rights’ organizations. The Consumer Federation of America argues that “[the] new requirements, coupled with strict deadlines for production upon the penalty of an automatic dismissal are difficult for the most organized person to meet, never mind someone who has had his or her home destroyed by Katrina.”

Opponents of the bill also argued that it makes the government “a bill collector for private companies”, and could lead to criminal prosecutions over matters best left in civil courts, and theoretically even to life imprisonment under federal three-strikes laws. Such opponents view the bulk of the act either as “bought and paid for” by the Credit Card Industry, who spent millions lobbying in support of the bill, or else as an unfortunate compromise between the lobbyists for banks and bankruptcy lawyers, such as the American Bankruptcy Institute (ABI). Nathalie Martin, of ABI, said that “Many people will still qualify to file for Chapter 7,” which means liquidation of assets in exchange for cancellation of debt.

Sunday, January 16, 2022

United Kingdom-based pharmaceutical giant GlaxoSmithKline (GSK) confirmed January 15 it had rejected three “unsolicited, conditional and non-binding proposals” by Unilever to acquire its Consumer Healthcare division, including one bid of GBP50 billion in value made on December 20, believing Unilever “fundamentally undervalued” the business and its potential.

News that Unilever attempted to buy GSK Consumer Healthcare for 50 billion pounds, split between GBP41.7 billion in cash and 8.3 billion in Unilever shares, was first reported by The Sunday Times, and subsequently confirmed by both companies. Had the latest acquisition offer gone through, it would have been the largest deal since the beginning of the Covid-19 pandemic, and one of the biggest ever among companies listed on the London Stock Exchange.

A deal would likely mean integrating the GSK division into Unilever’s own beauty and personal care business, which has seen profit margins struggle under Covid-19 lockdowns and higher costs for plastics and petrochemicals.

A brief response on the Unilever website confirmed it “had approached GSK and Pfizer about a potential acquisition”, and adds GSK Consumer Healthcare “would be a strong strategic fit” as the company looks to rework its portfolio. GSK indicated the proposals were “carefully evaluated” by its board of directors, but unanimously rejected under the conclusion they “were not in the best interests of GSK shareholders” and “failed to reflect the intrinsic value of the business and its potential”.

The Sunday Times have indicated the latest deal did not include an acquisition premium or recognition of corporate synergies; the joint venture between GSK and healthcare firm Pfizer, which holds a minority stake in the company, was initially projected to generate GBP500 million in cost savings by this year and realise “substantial cost synergies”. The BBC’s business editor Simon Jack wrote that a standard takeover premium would be about 30%, but could be reduced over the GBP10 billion in debt GSK was predicted to “leave on the books”, of the GBP22 billion net debt GSK reported for Q3 2021.

The deals were assessed by the Board respective of a proposed demerger of GSK Consumer Health into a separate PLC in the middle of this year. Jack wrote GSK “always” had “an open mind to a trade sale to another party if the price was right.” Unilever did not take into account the standard takeover premium, the value of cost savings and Board confidence Consumer Health could deliver “superior organic sales growth” of between four and six per cent in the medium term. This was despite valuations of about GBP50 billion by Goldman Sachs and Barclays analysts, and a lower GBP45 billion valuation by Jeffries Group.

There are no current talks between Unilever and either Pfizer or GSK, and the Unilever statement reads: “There can be no certainty that any agreement will be reached.” Under CEO Alan Jope, Unilever has focused its investments and marketing on brands which “communicate a strong environmental or social purpose” by streamlining its holdings in items like beauty products and tea. Jope previously said Unilever would concentrate on smaller takeovers in industries like luxury beauty and wellness.

However, Russ Mould, investment director at AJ Bell, told the BBC this would be a “high risk deal” at a time investors are cautious about GSK’s performance, but also a time of rising inflation he says encourages “consumer goods with loyal customers”. Mould added despite strong cashflow, Unilever had recently missed targets on sales and profit margins, putting pressure on the CEO.

Pressure by activist shareholders Elliott Management Corporation and Bluebell Capital Partners have also mounted against GSK CEO Emma Walmsley over the unit’s failure to develop a Covid-19 vaccine and Walmsley’s own lack of scientific experience. GSK has been involved in the ongoing development of a Covid-19 vaccine with French biopharmaceutical company Sanofi, and announced preliminary results from Phase 3 trials last month.

In 2018, Unilever bought several consumer nutritional products from GSK, including its flagship product Horlicks, and merged its Indian subsidiary, Hindustan Unilever, with GSK Consumer Healthcare India.

Thursday, November 1, 2007

The Westboro Baptist Church has lost a lawsuit and has been ordered by United States District Court: District of Maryland to pay US$11 million to the family of Marine Lance Cpl. Matthew Snyder, a fallen soldier, who was killed while serving in Iraq.

The lawsuit was filed by Snyder’s father, Albert, after the church held a protest across the street from the cemetery where funeral services were being held. The church was sued for, “defamation of character, invasion of privacy–intrusion upon seclusion, invasion of privacy–publicity given to private life, intentional infliction of emotional distress and civil conspiracy,” according to court documents obtained by Wikinews.

Wikinews has also learned that the church filed a motion for a mistrial on October 29, but was ultimately denied.

The jury ordered that $2.9 million be awarded to the Snyder family for compensatory damages and $8 million in punitive damages, but reports say that the church cannot afford that amount, with their assets worth under $1 million. The defendants plan to appeal the judgment and have expressed confidence they can get it overturned.

Tuesday, October 8, 2013

Unlike some parts of the US Federal Government, the Consumer Financial Protection Bureau (CFPB) has been open during the federal government shutdown and recording a record-low number of complaints submitted by consumers against mortgage companies, credit card companies, student loan providers, banks, money transfer providers, companies who provide credit reports, and other companies providing consumer loans.

With data not available for yesterday, the first four days of the shutdown had daily totals of 37, 16, 13, and 3 complaints. With the exceptions of September 29 with 15 complaints and September 28 with 23, it is the lowest daily total since March 16 of this year when 36 total complaints were recorded and February 23 of this year with 14. The total complaints are also down from the same dates last year, when the total complaints per day for the first four days of October 2012 were 272, 298, 288, and 225.

Of the 69 filed complaints recorded so far this month, 27 were complaints about mortgage companies, 21 were about bank accounts and 10 were about credit card companies. 40% of credit card companies complaints, 42.9% of bank account complaints and 48.1% of mortgage complaints are currently listed as still in progress. Most of the rest have been closed with an explanation.

Bank of America leads all companies in terms of total complaints filed this month with 9. Bayview Loan Servicing, LLC andJPMorgan Chase have 7 complaints each. Ally Bank, Sovereign Bank, and Wells Fargo have 4 each. Flagstar Bankand Equifax have 3 each. Citibank, Nationstar Mortgage, TD Bank, Amex, and FirstMerit Bank have 2 complaints each. 18 financial services companies have 1 complaint each filed against them.

During the government shutdown, some CFPB staff have voiced their opinions on Twitter. Dan Munz, deputy assistant director for consumer engagement at the CFPB, tweeted, “Boy, shutdown week has really created a sudden bumper crop of amateur federal management experts.”; “Also, seems like Boehner is singlehandedly undoing whatever progress he’d made in portraying this as a Dem [Democratic Party] shutdown.”; and “Basically, there’s now a strong incentive to fill legislation with minor symbolic things you can bargain away later to protect the core.”

The agency has been able to stay open during the government shutdown because it is funded by the Federal Reserve. According to Amanda Terkel at the Huffington Post, Republican members of the United States House of Representatives have put closing the CFPB on their wish list of items in negotiating for a new debt ceiling limit. Party members have previously stalled the appointment of Richard Cordray as the CFPB boss as a way of hindering it from engaging in oversight of financial organizations in the the US.