Norris McLaughlin & Marcus, P.A.

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REWIND: International Business News #55

Posted on February 1st, 2013 | Author:

  • Investors in MF Global may be close to recovering the majority of their investments in the now defunct brokerage firm.  A little over one year after MF Global entered bankruptcy in October 2011, following discoveries that $1.6 billion of the company’s funds were involved in a series of questionable wire transfers, trustee James W. Giddens surprised investors, creditors, and other involved parties by submitting a proposed deal that provided a way for the return of approximately 93% of U.S. investors’ money.  The deal was made possible through cooperation on the part of Giddens; Louis Freeh, former director of the FBI and trustee representing MF Global’s creditors; and an administrator overseeing the British unit of MF Global.  Giddens estimates that if a series of settlements with JPMorgan and other firms fall into place, nearly 100 percent of the missing money could be returned to the U.S. customers.  Foreign investors, unfortunately, may not fare as well in their recovery process.  The deal has been submitted to U.S. Bankruptcy Judge Martin Glenn, who is expected to approve the settlement this week.
  • For the first time since the second quarter of 2009, the U.S. economy contracted, with gross domestic product falling by 0.1% in the last quarter of 2012.  Attributed to reduced government spending—which fell by over 20 percent last quarter—and lower exports, among other factors, the reported contraction was well below the expected 1.1% of growth in GDP for the end of 2012.  Still, despite the appearance of bad news, the report actually provided good news, noting that the segments of the domestic, private economy, including housing, consumer spending and business investment in equipment and software, performed strongly.
  • After months of delay, RIM made several announcements at its launch event held in New York this week. In addition to unveiling its new phone, the Z10, the company also introduced a new operating system, BB10, and announced that the company will officially be changing its name from “Research in Motion” to “Blackberry.”  In addition, the company announced that it will be releasing a second phone model, the Q10, later this year; unlike the Z10, which is an entirely touch-screen device, the Q10 will retain Blackberry’s signature mark, a physical keyboard. While reviewers and others who had advance access to the Z10 had positive impressions of the phone, analysts indicated concern over the delay between the announcement of the new products and for phones to actually be available for purchase in the States.  Such a delay could hinder sales, representing another concern as Blackberry struggles to find a place for itself in the competitive mobile device market.
  • Despite recent well-publicized troubles, Boeing indicates that it has no plans to change the lithium batteries used in its 787 Dreamliner airplanes and will continue to increase production of the high-profile plane.  Boeing and its suppliers, including the Japanese-based supplier of the lithium batteries at issue, have been cooperating with the Federal Aviation Administration to determine the cause of the battery fires and other performance issues that ultimately led to Dreamliners being grounded in the United States and around the world.  Still Boeing and Kanto Aircraft Instruments, the makers of the batteries, assert that they have found no link between the recent performance issues and the battery design. Rather the only issue Boeing discovered was that airlines needed to replace the batteries faster than expected.  Boeing’s share price rose in response to the announcement, after having fallen following the news of the battery fire earlier this year in Boston.