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Fri, Jan 08, 2010 - Page 10 News List

World Business Quick Take



FirstFed files for Chapter 11

FirstFed Financial Corp, a savings and loan holding company whose First Federal Bank of California was closed last month by US regulators, has filed for Chapter 11 bankruptcy protection. FirstFed listed assets of US$4.47 million and debt of US$159.7 million in a filing yesterday in US Bankruptcy Court in Woodland Hills, California. The Federal Deposit Insurance Corp (FDIC) said on Dec. 18 that First Federal’s 39 branches would be taken over by OneWest Bank FSB, the Pasadena, California-based bank created out of the former IndyMac Bancorp. First Federal had about US$6.1 billion in assets and US$4.5 billion in deposits as of Sept. 30, the FDIC said. FirstFed, ranked among California’s 10 biggest banking companies, accumulated losses during the past two years as falling home prices led option adjustable-rate mortgages to reset at higher monthly rates than borrowers could afford.


Court approves Nortel sale

Nortel Networks Corp won court permission to auction its Internet telephone business with an opening bid of US$282 million from Genband Inc, which makes equipment for Internet calling. Bankruptcy judges in the US and Canada approved rules for the auction, including as much as US$13.6 million in fees for Genband, which is co-owned by Equity Partners III LP, an investment manager for JPMorgan Chase & Co. The two judges, acting in a joint hearing linked by audio and video, overruled an objection to the fees, agreeing with Nortel that the payments were needed to lock in Genband’s bid. The incentive fees were necessary because “this is a fragile business,” Nortel chief strategy officer George Riedel said on Wednesday in court in Wilmington, Delaware. The unit lost as much as US$17 million in the last quarter and the outlook for future business is becoming less certain, he said.


Ex-SG trader to face trial

Former Societe Generale (SG) trader Jerome Kerviel is expected to stand trial in June on charges connected to a multibillion-euro trading scandal, a Paris court said. Societe Generale accused Kerviel of betting tens of billions of euros of the bank’s money without permission, which led to almost 5 billion euros (more than US$7 billion) in losses once the bank unwound his positions in January 2008. Kerviel argues his superiors knew about his risky transactions. SG says he acted alone. Kerviel was charged with forgery, breach of trust and unauthorized computer use. He faces up to five years in prison and 375,000 euros in fines, if convicted.


Lockheed to cut 1,200 jobs

US global security giant Lockheed Martin said on Wednesday it would shed about 1,200 US jobs as part of a restructuring within its electronics systems business. Lockheed Martin announced the job reductions as it unveiled the name and senior-level organizational structure for a new business created in a realignment of two prior stand-alone businesses. Mission Systems & Sensors (MS2) was launched on Jan. 1 and combines the former Maritime Systems & Sensors, supporting maritime forces, with Systems Integration – Owego. The defense industry giant said the new business retains a “unique breadth and depth of support for maritime forces” paired with a significantly expanded portfolio of capabilities in products, processors, and integration expertise. Lockheed Martin employs about 140,000 people worldwide.

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