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Whatever your view may be of the economy, it is prudent to have contingency plans in hand to meet adverse market conditions Lloyd Benton & Taylor, LLC is a corporate debt restructuring company based in Fort Lauderdale, Florida. If you are in the need of debt restructuring, contact us today for an initial consultation.
Roderick J. Lloyd
President
Lloyd, Benton & Taylor, LLC
09-03-09 WASHINGTON – Jobless rate at 9.7 %, with 216,000 jobs lost in August
The unemployment rate jumped almost half a point to 9.7 percent in August, the highest since 1983, reflecting a poor job market that will make it hard for the economy to begin a sustained recovery.
Comment:
Bailouts and stimulus packages are not saving jobs, they are losing them!
Lloyd, Benton & Taylor’s proven formula?
>>>Rapid Restructuring to save the company and save jobs and then grow the company to generate real and lasting jobs!
07-31-09 FORT LAUDERDALE, FLORIDA - Commercial Property on the edge of a cliff?
Commercial property is clearly at the edge of a major, quite possibly unprecedented, downturn. Nationwide commercial delinquencies are up from $4BN one year ago to $29BN last month representing an astounding increase of 585%. Commercial sales in the state of Florida to May 2009 plummeted by 77% compared with the same period in 2008. The driving factor throughout the nation in this sector has been high and increasing levels of unemployment. In Central Florida - the state’s barometer economy - jobless rates shot up to10.8% last month. This is the largest increase in 34 years. This administration’s ‘free spending’ approach to resolving economic problems has already damaged the dollar and triggered the beginning of an inflationary spiral which is already affecting the cost of daily essentials - far more than is being revealed by the CPI and other ‘official’ statistics. Retail sales have therefore been hard hit as the nation trims its budget to adapt to the new circumstances. These facts are at the root of the rapidly declining demand for retail space and the rising number of vacancies.
04-14-09 WASHINGTON D.C.
Aiming to assert control over the nation's economic debate, President Barack Obama on Tuesday warned Americans eager for good news that "by no means are we out of the woods" and argued his broad domestic agenda is the path to recovery. But the government's broader message — that a full turnaround might be a long time coming — may not be welcome news for a weary U.S. public.
03-31-09 FORT LAUDERDALE, FL – ‘THE STIMULUS’
As part of the Stimulus Package, this administration has set aside very large amounts of funding for Public Works contracts over the next three years, from which many companies stand to be recipients. The primary stipulation for such contracts is that the recipient is financially sound, especially in the areas of Net Worth, Cash Flow and Reserves. On the downside, a further development last week from Washington is that Treasury Secretary Geithner has been given ‘draconian’ powers to ‘take over’ any company, private or public, whether a recipient of Federal Stimulus Aid or not, which, ‘in their opinion’, is not ‘financially sound.’
Solution: For both these reasons, to say nothing of the state of the economy, it is imperative that businesses address their excessive debt now. [Lloyd, Benton & Taylor can provide fast, effective support for your company in this area.]
11-21-08 Goldman cuts U.S. growth forecast
(Reuters) - Goldman Sachs on Friday lowered its U.S. growth forecast citing a fiscal policy stagnation, record increase in unemployment and a sharp decline in profits, deepening and extending the expected recession.
Goldman said it now expects U.S. GDP to fall 5 percent in the current quarter, with unemployment rate reaching 9 percent in the fourth quarter of 2009.
It also forecast the 10-year yield to fall to 2.75 percent by the end of the first quarter of 2009, as compared to previously estimated 3.5 percent.
"The combination of weaker real activity and slower inflation means that profits of U.S. companies will fall even more sharply than we had previously expected," Goldman said in a note to clients.
. . . . .
11-07-08 Washington - Jobless rate bolts to 14-year high of 6.5 percent
The nation's unemployment rate bolted to a 14-year high of 6.5 percent in October as another 240,000 jobs were cut, far worse than economists expected and stark proof the economy is deteriorating at an alarmingly rapid pace.
The new snapshot, released Friday by the Labor Department, showed the crucial jobs market quickly eroding. The jobless rate zoomed to 6.5 percent in October from 6.1 percent in September, matching the rate in March 1994.
Unemployment has now surpassed the high seen after the last recession in 2001. The jobless rate peaked at 6.3 percent in June 2003.
October's decline marked the 10th straight month of payroll reductions, and government revisions showed that job losses in August and September turned out to be much deeper. Employers cut 127,000 positions in August, compared with 73,000 previously reported. A whopping 284,000 jobs were axed in September, compared with the 159,000 jobs first reported.
So far this year, a staggering 1.2 million jobs have disappeared. Over half of the decrease occurred in the past three months alone.
Although the unemployment report was worse than expected, and Ford Motor Co. reported dismal third-quarter results and announced plans to cut more than 2,000 additional white-collar jobs, Wall Street investors appeared to take it all in stride. The Dow Jones industrial average was up more than 190 points in morning trading.
About 10.1 million people were unemployed in October, an increase of 2.8 million over the past year. A year ago, the unemployment rate stood at 4.8 percent
President Bush said the dismal employment figures reflect "the difficult challenges confronting the economy" and urged the country to have patience, saying a flurry of unprecedented government measures — including a $700 billion financial bailout package — will take time to work.
"I understand that Americans deeply concerned about the challenges facing our economy, but our economy has overcome great challenges before, and we can be confident that it will do so again," Bush said.
The employment market is much weaker than economists expected. They were forecasting the unemployment rate to climb to 6.3 percent in October and for payrolls to fall by around 200,000.
"The U.S. recession is deepening," said Michael Gregory, economist at BMO Capital Markets Economics. The final quarter of this year is getting off to a "particularly ugly" start, he said.
Job losses were widespread, reflecting the mounting carnage from a trio of crises — housing, credit and financial.
Factories cut 90,000 jobs, the most since July 2003. Construction companies got rid of 49,000 jobs with heavy losses in home building. Retailers cut payrolls by 38,000. Professional and business services reduced employment by 45,000. Financial activities cut 24,000 jobs, with heavy losses in mortgage banking and at securities firms. Leisure and hospitality axed 16,000 positions.
All those losses more than swamped some gains elsewhere, including in the government, as well as in education and health care.
Racing to assemble his new Democratic Cabinet, President-elect Barack Obama will huddle with economic advisers later on Friday. His team has been in close contact with the Bush administration to pave the way for a smooth hand-off of power.
All the economy's woes — a housing collapse, mounting foreclosures, hard-to-get credit and financial market upheaval — will confront Obama when he assumes office early next year. And, the employment situation is likely to get worse.
Many expect the jobless rate to climb to 8 percent, possibly higher, next year. In the 1980-1982 recession, the unemployment rate rose as high as 10.8 percent before inching down.
The grim numbers spurred calls from Democrats on Capitol Hill to provide fresh relief. House Speaker Nancy Pelosi said Democrats, in a lame-duck session later this month, will push to enact another round of economic stimulus of around $100 billion, possibly including provisions to create jobs through big public works projects.
White House press secretary Dana Perino appeared to suggest that additional action may not be needed.
"Today's employment numbers are a stark reminder of how critical it is we keep focused on utilizing the tools we now have to return our country to the strong job creation we had in recent years," Perino said. "We know what the main problems are tight credit and housing markets and we have the tools to solve them."
Workers with jobs saw only modest wages gains. Average hourly earnings rose to $18.21 in October, a 0.2 percent increase from the previous month. Over the past year, wages have grown 3.5 percent, but paychecks aren't stretching that far because high food, energy and other prices has propelled overall inflation at a faster pace.
To prevent the country from sinking into a deep and painful recession, the Federal Reserve last week ratcheted down interest rates to 1 percent and left the door open to further reductions.
The economy has lost its footing in just a few months. It contracted at a 0.3 percent pace in the July-September quarter, signaling the onset of a likely recession. It was the worst showing since 2001 recession, and reflected a massive pullback by consumers.
As U.S. consumers watch jobs disappear, they'll probably retrench even further, spelling more trouble for the sinking economy.
That's why analysts predict the economy is still shrinking in the current October-December quarter and will contract further in the first quarter of next year. All that more than fulfills a classic definition of a recession: two straight quarters of contracting economic activity.
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10-27-08 Fort Lauderdale, Florida - MARKET MELTDOWN - BAFFLING BAILOUTS - BANKRUPT BANKS - CREDIT CRISIS - RECORD UNEMPLOYMENT - RECORD FORECLOSURES - THE END OF THE WORLD AS WE KNOW IT? .............NOT NECESSARILY!
IMMEDIATE PRESS RELEASE
A FLORIDA FIRM ANNOUNCES THAT, AFTER ALL, THE 'TITANIC DOES HAVE LIFEBOATS', THERE IS A WAY OUT FOR A BUSINESS THAT MAY BE DROWNING IN PROBLEMS,
help may not be far away for hard pressed employers and the threatened jobs of their workforce....."In the present economic crisis, business owners are being too quick to close their doors without properly exploring other survival and recovery options" responds Roderick Lloyd, President of Florida based turnaround specialists, Lloyd, Benton & Taylor, LLC ("LBT"). He goes on to say, "....while general consulting firms provide a vital service to the distressed business community, their process can take a year or more to complete by which time - and especially at the present time - many of their clients will be out of business and contributing to the lines of unemployed. In contrast, LBT specializes in fast 90 day turnarounds by focusing exclusively on all categories of business debt and the related debt servicing. Excessive debt is the number one factor in business failures. This is especially so in the fast moving crisis events of the last month, where businesses still remain highly geared while, at the same time, banks are looking to their own survival and, without warning, are indiscriminately freezing their customers' credit lines."
08-01-08 Washington - "Jobless rate rises to 4-year high of 5.7 percent"
The nation's unemployment rate climbed to a four-year high of 5.7 percent in July as employers cut 51,000 jobs, dashing the hopes of an influx of young people looking for summer work.
July's reductions marked the seventh straight month where employers eliminated jobs. The economy has lost a total of 463,000 jobs so far this year.
The latest snapshot, released by the Labor Department on Friday, showed a lack of credit has stunted employers' expansion plans and willingness to hire. Fallout from the housing slump and high energy prices also are weighing on employers.
The increase in the unemployment rate to 5.7 percent, from 5.5 percent in June, in part came as many young people streamed into the labor market looking for summer jobs. This year, fewer of them were able to find work, the government said. The unemployment rate for teenagers jumped to 20.3 percent, the highest since late 1992.
The economy is the top concern of voters and will figure prominently in their choices for president and other elected officials come November. The faltering labor market is a source of anxiety not only for those looking for work but also for those worried about keeping their jobs during uncertain times.
Job losses in July were the heaviest in industries hard hit by the housing, credit and financial debacles. Manufacturers cut 35,000 positions, construction companies got rid of 22,000 and retailers shed 17,000 jobs. Temporary help firms — also viewed as a barometer of demand for future hiring — eliminated 29,000 jobs. Those losses swamped job gains elsewhere, including in the government, education and health care.
All told, there were 8.8 million unemployed people in July, up from 7.1 million last year. The jobless rate last July stood at 4.7 percent.
More job cuts are expected in coming months. There's growing concern that many people will pull back on their spending later this year when the bracing effect of the tax rebates fades, dealing a dangerous blow to the fragile economy. These worries are fanning recession fears.
In June, the Fed halted a nearly yearlong rate-cutting campaign to shore up the economy because lower rates would aggravate inflation. On the other hand, boosting rates too soon to fend off inflation could hurt the economy.
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06-30-08 Fort Lauderdale - "The unemployment problem continues to grow."
The Labor Department recently announced that the number of jobless people looking for work last month had increased yet again by 861,000 to a record 8.5 million, with a further 5.2 million reduced to part time work. This represents a huge 22% increase from this time last year.
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04-04-08 Fort Lauderdale - "The storm clouds are gathering...
And you need to be prepared. You are invited to come and talk to us now to assist you in your future plans"...Roderick J. Lloyd (President, Lloyd, Benton & Taylor, LLC)
. . . . .
04-02-08 Washington DC - 'RECESSION'
Employers slashed 80,000 jobs in March
Employers worried about recession slashed 80,000 jobs in March, the most in five years and the third straight month of losses. At the same time, the national unemployment rate rose from 4.8 percent to 5.1 percent, the clearest signal yet that the economy might already be contracting. The new snapshot of the job market, released by the Labor Department Friday, underscored the damage that a trio of crises _in the housing, credit and financial sectors - has inflicted on companies, jobseekers and the economy as a whole. The unemployment rate was the highest since September 2005, when significant job losses followed the devastating blows of Gulf Coast hurricanes. Job losses were widespread in March. Construction, manufacturing, retailing, financial services and various business services all racked up losses. That overwhelmed gains elsewhere, including in education and health care, leisure and hospitality as well as in government. The new employment figures were much weaker than economists were expecting. They were anticipating a drop of 50,000 payroll jobs and the unemployment rate to rise to 5 percent.
. . . . .
04-02-08 Washington DC - 'RECESSION'
Federal Reserve Chairman, Ben Bernanke, acknowledged that, "the United States could reel into recession from the powerful punches of housing, credit and financial crisis."
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03-31-08 THE BANKS
Associate Editor of Barron's, Michael Santoli, commenting on their leading article, 'Have the Banks Hit Bottom?', admitted, ".there is too much hope out there; even the banks are throwing in the towel by unloading stock at these depressed levels.
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09-13-07 Bankruptcies
A huge 50% increase in Business Bankruptcies was recorded for the first 6 months of 2007, when compared with same period last year. The total corporate filings for the first half of 2007 were 11,563.
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08-21-2007 Financial job cuts soar on housing woes
NEW YORK (Reuters) - A deepening U.S. housing slump has caused an alarming surge in job losses at U.S. financial services companies, and the end is nowhere in sight, consulting firm Challenger, Gray & Christmas Inc. said on Tuesday.
The industry has announced 87,962 job cuts so far this year, 75 percent more than the 50,327 recorded for all of 2006, Challenger said. Nearly one-fourth of this year's cuts have been announced in August alone.
Of this year's cuts, 35,830, or 41 percent, were tied to housing market troubles, including riskier sub-prime mortgages. Job cuts by real estate and construction firms totaled 21,620, more than twice the number for all of 2006, Challenger said.
"Many companies expected the mortgage situation to implode; they've just been wondering when the bubble would burst," Chief Executive John Challenger said in an interview. "But many are stopping on a dime, shutting down operations.
"Companies are not surprised by what's happening, but the reality of the situation and the speed with which it occurred is shocking," Challenger added. He said it could be months before housing-related job cuts peak.
In the last week, investment bank Bear Stearns, credit card issuer Capital One Financial Corp and mortgage lenders Countrywide Financial Corp and First Magnus Financial Corp announced 8,640 mortgage-related job cuts, Challenger said.
Another 2,400 cuts were announced by SunTrust Banks Inc as part of the bank's existing cost-cutting program.
Many companies exposed to the housing market have struggled with rising delinquencies and foreclosures as mortgage rates have reset higher and housing price appreciation has slowed.
Meanwhile, credit conditions have tightened as investors have grown unwilling to buy home loans once thought safe, starving many lenders of cash they need to operate normally. Dozens of mortgage lenders have quit the industry this year.
April has been the year's busiest month for financial job cuts, Challenger said. That month, companies announced 33,789 cuts, including 17,000 by Citigroup Inc and 3,200 by bankrupt mortgage lender New Century Financial Corp.
Job cuts are mounting as credit losses widen.
On Tuesday, the government's Office of Thrift Supervision said troubled assets, or loans at least 90 days past due, rose at savings and loans it regulates to $14.2 billion in the second quarter from $9.5 billion a year earlier.
Meanwhile, home foreclosure filings in July surged 93 percent from a year earlier and rose 9 percent from June, to 179,599, according to a Tuesday report by research firm RealtyTrac.
John Challenger said it's understandable for mortgage workers to feel whipsawed. Countrywide, for example, cut 500 jobs last week after having added 6,931 jobs from January to July, with increases in every calendar month.
"It's devastating (for morale)," he said. "It's hard to keep morale up, given the boom-bust nature of the mortgage sector."
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09-21-2006 Deepening Insolvency – Widening Controversy
Fort Lauderdale, Florida - September 21, 2006
The claim of deepening insolvency – where officers, directors, lenders, accountants, auditors or other parties are held responsible for wrongfully prolonging the life of a company – continues to be a lightening rod of controversy for bankruptcy courts.
New decisions coming out of Delaware and the Third Circuit reject deepening insolvency as a cause of action, yet dozens of cases at both state and federal levels continue to claim the defendants either negligently or fraudulently extended the life of a business, causing damage to creditors or other interest holders. Is there a legal dividing line between trying to save a troubled company versus making the situation worse?
This ‘grey’ area of the law is a minefield and many well intentioned company officers may well fall foul of this aspect of Bankruptcy Law. The combination of the tighter Bankruptcy provisions of 2005 and, now, the issues surrounding the undue extension of company life – yet to be defined – mean that more than ever any company should take a long look before filing for any chapter of Bankruptcy. Bankruptcy is swiftly becoming an act of last resort.
The message here is twofold:
1. At the first sign of trouble ahead, it is now more important than ever to engage a proven outside Turnaround Professional.
2. If your company is currently at the 11th hour, Bankruptcy may not be an option; you need to immediately contact a turnaround firm that has a proven record in conducting last minute rescues!
Roderick J. Lloyd
President & Managing Partner
Lloyd, Benton & Taylor, LLC
. . . . .
In fact, CFOs are more “sour” in their attitudes than at anytime in the five-year history of the survey.
Given the generally strong performance of the economy, the results surprised John Graham, a finance professor at Duke University, and CFO magazine’s Don Dufree, who coordinate the survey.
“I was surprised,” Graham told WRAL Local Tech Wire. “We are at a five-year high in pessimism or a five-year low in optimism.”
Dufree concurred, saying in a telephone interview: “Yes, we were surprised to find that CFO optimism has fallen as much as it has” even though the attitudes are following a trend that started the last quarter.
However, Graham is not ready to predict that a recession is on the economic horizon.
“The economy is not going into the tank,” he said. “There is not a consensus. One-third of CFOs list a probability of a session, but that doesn’t mean one is guaranteed. The way I would interpret it is that we will have slower growth over the next couple of years.”
Many CFOs cited similar concerns in the survey data, which was gathered on Sept. 10.
Despite U.S. unemployment being under 5 percent and consistent growth in the gross domestic product, many CFOs said they were hearing too many rumblings from customers and other people to remain optimistic themselves about business.
“Weak consumer demand – that’s the first time we had heard that,” said Graham. Consumer confidence, and thus spending, is being hurt by interest rates, energy costs and worries about housing.
“Fuel costs apparently have worked their way through the economy,” Graham said. “Now, consumer demand is the major concern.
“The number two concern is wage inflation,” he added. “One year ago, we were not hearing that.”
The low unemployment rate is help exacerbate company’s searches for workers, which drives up bidding to hire those that are available, Graham said.
“Some sectors are having a harder time finding skilled labor, and it’s true in enough sectors that CFOs are concerned about wage inflation,” Graham explained. Two areas under stress are construction, where there are shortages of experts such as plumbers, and in high-tech, with a growing need for programmers and lab technicians, he added. The net result is a “little bit of a spiral in wage inflation,” he said.
Dufree stressed that concerns about the housing industry are fueling consumer anxiety.
“CFOs I have talked to tell me that the economy is in decent shape, but lot of them see that housing prices could be crashing,” he said. “Fuel prices are also still uncertain. Those are two issues that take dollars out of consumers’ pockets and could lead to lower consumer spending, which could hurt the economy.”
Key findings of the survey include:
- Nearly half of CFOs are more pessimistic about the U.S. economy, and only 19.8 percent more optimistic, than last quarter.
- Capital spending plans have been cut, with planned increases of only 5.1 percent over the next 12 months, down from a planned increase of 7.5 percent last quarter
- CFOs expect earnings to increase 9.4 percent over the next 12 months, down from last quarter’s 10.4 percent predicted increase
- Weak consumer demand, rising labor costs and high fuel costs could lead to additional capital spending, and hiring cuts will follow if consumer demand weakens further
- CFOs’ optimism about their own firms also fell, with 45.8 percent more optimistic about their company’s prospects, in comparison to 49 percent last quarter.
Analysts said the deficit with China is likely to rise given that the Chinese reported on Monday that their trade surplus for August set a fourth straight monthly record.
. . .
. .
It marked the fourth consecutive year that America's trade deficit has set a record as American consumers continued their seemingly insatiable demand for all things foreign from new cars to televisions and electronic goods.
The increased foreign competition has helped to keep the lid on prices in this country, but critics say the rising trade deficit is a major factor in the loss of nearly 3 million manufacturing jobs since mid-2000 as U.S. companies moved production overseas to lower-waged nations. Many economists believe those manufacturing jobs will never come back.
"Such a huge trade gap undercuts domestic manufacturing and destroys good U.S. jobs," said Richard Trumka, secretary-treasurer of labor's AFL-CIO. "America's gargantuan trade deficit is a weight around American workers' necks that is pulling them into a cycle of debt, bankruptcy and low-wage service jobs."
Sen. Byron Dorgan, D-N.D., said the new deficit figure showed that "our trade policy is an unbelievable failure that is selling out American jobs and weakening our economy."
Last year's deficit reflected the fact that imports rose by 12.9 percent to an all-time high of $2 trillion, swamping a 10.4 percent increase in exports, which reached a record high of $1.27 trillion.
For December, the trade deficit edged up a slight 1.5 percent to $65.7 billion, the third highest monthly figure on record.
Bush, in an effort to counter the growing anxiety over America's ability to compete with such rising economic powers as China and India, unveiled a new American Competitiveness Agenda in his State of the Union address to double government spending on basic research, extend tax breaks for company spending on research and hire thousands of new math and science teachers for the nation's high schools.
But critics contend that the trade deficit will keep growing unless the administration takes a harder line against unfair trade practices in low-wage countries such as China, a country they contend has gained a huge advantage over America by artificially depressing the value of its currency, which makes Chinese goods cheaper for American consumers and American products more expensive in China.
The U.S. trade deficit with China rose to a record $201.6 billion last year, the highest deficit ever recorded with any country and 24.5 percent above the previous record of $161.9 billion set in 2004. Part of that increase reflected a 42.6 percent increase in imports of Chinese clothing and textiles, which soared at the beginning of the year after the removal of global quotas.
American manufacturers, arguing that the U.S. textile and clothing industries were losing thousands of jobs, got the administration to negotiate a three-year agreement with China to reimpose quotas in a number of categories.
The United States
also recorded record deficits with Japan at
$82.7 billion. Until it was surpassed by China
in 2000, Japan was the country that had the largest
trade gap each year with the United States.
America's trade deficit set records with much
of the rest of the world as well. Among those
records was a $122.4 billion gap with the 25-nation
European Union, a $92.7 billion deficit with
the nations that belong to the Organization
of Petroleum Exporting Countries, a $76.5 billion
deficit with Canada and a $50.1 billion deficit
with Mexico. Canada and Mexico are America's
partners in the North American Free Trade Agreement.
The deficit with the countries of South and
Central America rose to a record $50.7 billion
last year.
A huge 39.4 percent jump in petroleum imports, which rose to $251.6 billion, was a major factor contributing to last year's deficit increase. The price of those imports rose to an all-time high, reflecting tight global supplies. The United States was forced to import more oil in the fall after Hurricane Katrina caused widespread shutdowns of Gulf Coast production.
The rising trade deficits must be financed by increased borrowing from foreigners, who so far have been happy to sell us their products and hold U.S. dollars in payment which they invest in U.S. stock, bonds and other assets. The concern is that at some point foreigners will want to reduce their dollar holdings. If the change occurs at a rapid pace it could send the value of the dollar, U.S. stocks and bond prices all plunging.
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. .
12-14-2005 TDB RESEARCH ARCHIVE REPORT: Companies with Debt Forgiveness*
147 Companies with Debt Forgiveness in the First Nine Month of 2005, Rapidly Increasing and Recording the 2nd Highest in History - 39 Cases in the Service Sector, Setting a Record-High
The number of companies receiving debt forgiveness has been increasing. While the "Financial Revitalization Program", aiming to cut the bad debt in half, is in its final stage in 2005, large financial institutions aggressively promoted settlements by utilizing debt forgiveness. In addition, not only the "Industrial Revitalization Corporation of Japan" and "Resolution and Collection Corporation" but also "funds" and "servicers" have been using debt forgiveness much more often for implementing business turnaround. In addition, as more business turnarounds are expected to be seen in local regions in the future, more local financial institutions are likely to use debt forgiveness for business revitalization. Debt forgiveness has already become an established scheme of business turnaround and its demand has been increasing even after the peak of bad debt settlements.
Teikoku Databank conducted research on companies
that received debt forgiveness, which include
surviving companies as well as companies that
had reorganized, dissolved, or merged after the
agreement of debt forgiveness from 1985 to September
30, 2005.
All are principally counted at the time of reaching
an agreement in debt forgiveness.
This is our 13th research effort after the most
recent one in June 2005.
. . .
. .
09-14-05 JOBLESS CLAIMS RISE TO LARGEST AMOUNT IN NEARLY A DECADE ON KATRINA; ENERGY PRICES SOAR
WASHINGTON, Thursday, September 14 -- A total of 68,000 Americans lost their jobs due to Hurricane Katrina and filed for unemployment benefits last week, pushing these applications up by the largest amount in nearly a decade.
The Labor Department reported that claims for benefits rose by 71,000 last week, with 68,000 of that total attributed to layoffs due to Katrina, which devastated New Orleans and other areas along the Gulf Coast. That figure exceeded the claims filed in the weeks following the Sept. 11, 2001 terror attacks, and analysts predicted that it would be revised even higher once states catch up with processing a flood of claims.
Meanwhile, consumer inflation surged by 0.5 percent in August as energy prices shot up by the largest amount in more than two years, even before Katrina hit at the end of the month. The hurricane caused a further spike in energy prices due to widespread shutdowns of oil and natural gas facilities in the Gulf Coast region.
Analysts have predicted that Katrina, the country's worst natural disaster, will trim economic growth by as much as a full percentage point in the second half of this year and cost around 400,000 jobs.
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. .
08-22-05 Effect of New Bankruptcy Code
A recent poll taken by the Turnaround Management Association “TMA” found little to like in the revised code. Simply put, the requirements for filing are now more stringent and, once in Chapter 11, the new arrangements weigh firmly in favor of creditors. From October 17 this year, the court will possess broader powers to appoint a Trustee and convert to a Chapter 7 proceeding. The TMA findings reproduced below underscore the need for companies to make every effort to restructure out of court:
“Just three months before enactment of the revised Bankruptcy Code, many corporate renewal professionals are still scratching their heads as they try to determine what the impact will be on their work with companies trying to recover from financial distress. However, one thing is clear – members of the Turnaround Management Association who responded to a June 2005 TMA Trend Watch poll give a thumbs down to many of the provisions that they believe make it more difficult for companies to reorganize under what they perceive is a more creditor-friendly law.
"The new bankruptcy legislation will require a more disciplined financial planning process on behalf of the debtor before filing," said Ward Mooney, chairman of the Turnaround Management Association and president of Bank of America Retail Finance Group in Boston. "To use the bankruptcy process constructively, debtors will have to be confident about their operating liquidity and execute strategies that will ensure enough liquidity to successfully get through the process and emerge a stronger company."
Three major constituencies within TMA's membership participated in this poll – attorneys, lenders and turnaround specialists. Overall, most respondents anticipate an increase of 10-25 percent in preemptory business bankruptcy filings during the 60 days before Code revisions go into effect in October 2005. They especially point to retail, automotive suppliers and airlines as most likely to show a significant increase in Chapter 11 filings prior to October.
More than 70 percent of the attorneys and 60 percent of the lenders and turnaround specialists were concerned about the negative impact of Section 365 on retail and other corporations that have numerous real estate leases. In this Section the time period for a company to decide whether to keep or reject its nonresidential real property leases changes to 120 days with one 90-day extension. Previously, filers, particularly retail entities, would extend the current 60-day deadline many times, sometimes drawing out the process for years.
"While this may have seemed to be an inordinate amount of time to determine whether a location was viable, it did allow for an orderly and studied approach to rehabilitating companies in bankruptcy," said James B. Matthews, TMA vice president of public affairs and president of Prime Locations LLC in Dallas. "The additional penalty for guessing wrong on which sites to keep will definitely result in more Section 363 asset sales, and likely more liquidations of companies and loss of jobs."
The poll also revealed the general belief that the revised Code favors creditors over debtors. "Some changes such as those in 546 (c) on reclamation are very favorable to creditors who provide goods to debtors," said John Rizzardi, TMA's immediate past chairman and a bankruptcy attorney with Cairncross & Hempelmann PS in Seattle. "Creditors no longer have to rely on their state laws. This provision will allow vendors up to 45 days after the debtor received goods or 20 days after the petition date to ask for return of goods. Under the previous Code, creditors had just 10 days after delivery to make a reclamation demand. In addition, the bankruptcy amendments provide a seller of goods an administrative expense claim for the value of any goods received by the debtor within 20 days prior to the petition date. This strengthens the rights of vendors; however, vendors should become familiar with the new changes and act promptly in any bankruptcy in order to maximize their rights."
Section 366 elicited the most negative response, with 75 percent overall saying its provisions make it more difficult for a company to reorganize. This section relates to the right of utilities to seek "adequate assurance" of payment from the debtor in cash or cash equivalent. In the past, "assurance" of payment was left undefined.“
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. .
4-27-05 "Bankruptcy of
Long-Established Companies" in Japan Reached
27.3% in 2004,
setting an all time record high”
The Component Rate Jumped about 2.6 times in
the Past Decade – Is it time for many senior
US Corporations to heed these early warning signs
from Japan and take preventative action?
"A Long business history symbolizes a company's credit" is an old myth. In February 2005, the bankruptcy of long-established companies (with more than 30 years of business history since its founding) accounts for 30.2% of the total number of bankruptcies, setting the highest rate in recorded history (first time to exceed 30%) on a single month basis.
The major reasons for the increase of long-established
companies' bankruptcies are as follows:
1. Not capable of responding to the changes in
industrial structure; 2. Susceptible to falling
asset values caused by the bubble economy burst
as compared to newly established companies;
3. Overall aging of corporations due to the decrease
in the establishment of new companies.
[Teikoku Databank conducted research and analysis on the bankruptcy trend of long-established companies by business history, liabilities, sector, types of bankruptcy, and area.]
. . .
. .
4-20-05 - CPI Report: INFLATION IS BACK!
The main problem for the stock market is the undeniable fact that inflationary pressures are increasing. This week, the catalyst setting off the worst reaction to those fears was the Wednesday report that the core rate of CPI in March rose 0.4%. That was well above the expected 0.2% increase, and followed on a 0.3% February increase. These levels are up sharply from a year ago. The release of the Federal Reserve Beige Book later that day poured more fuel on the fire. The trends from the Federal Reserve districts, based on anecdotal reports, were that "upward price pressures have strengthened" and that "high energy prices were already, or could soon be, damping consumer demand."
. . .
. .
March ’05 – Turnaround Management Association
“BANKRUPTCY SHOULD BE LAST, NOT FIRST, OPTION……
NEGOTIATIONS ARE KEY TO OUT-OF-COURT RESTRUCTURES”
“Companies fall into distress for many reasons. When they do, management’s first reaction often is to file for Chapter 11 bankruptcy. However, filing bankruptcy should be a company’s last resort because higher returns for all stakeholders at a lower cost can be achieved through an out-of-court restructuring or liquidation. In addition, the chances for a successful operating turnaround increase without the negative publicity a bankruptcy filing often generates. A competent turnaround professional can assist in evaluating a company’s position and creating a viable action plan. In addition, an independent turnaround professional may provide a company with badly needed credibility when it comes to approach creditors to ask for concessions.”
Ed Rothberg / Bankruptcy Section / Weycer, Kaplan, Pulaski & Zuber, P.C.
“This approach has always been the primary strategy for this firm’s engagements”
Roderick J. Lloyd - Lloyd, Benton & Taylor, LLC.
. . . . .
03-03-05 - Survey: CFOs
less optimistic about economy
Business optimism is dropping in the United States, according to a survey by
Duke University and CFO Magazine.
The quarterly survey asks chief financial officers from a range of public and
private companies globally about their economic outlook.
This quarter, only 46 percent of CFOs in the United States are more optimistic
about the economy than they were last quarter, continuing a downward trend from
the past year.
Fifty-five percent of CFOs had a positive outlook in the fourth and third quarters,
and more than 70 percent were optimistic in the second quarter.
"This is the least optimistic that CFOs have been in the last two years," said
John Graham, professor of finance at Duke's Fuqua School of Business and director
of the survey.
CFOs are concerned that inflationary labor costs and the depreciating U.S. dollar
will hamper economic growth. They are also concerned about the cost of health
care, the federal budget deficit, high fuel costs and an increasingly competitive
economic environment, all of which will slow earnings and capital spending growth
in the coming year.
The survey was concluded Feb. 27 and reflects responses from 534 CFOs, including
293 from the United States, 183 from Asia and 58 from Europe.
. . .
. .
02-10-05 Debt Forgiveness
the Preferred Option for Japan’s Recovery
Lloyd, Benton & Taylor, LLC
has always advocated this approach for its
clients rather than the destructive process
of signing away control of a business to
the Bankruptcy Courts. Since the Japanese
economy has been in recovery for a much longer
period than that of the USA, Japan may be
a very good model for us to follow. View
Article
. . .
. .
02-01-05-Washington,
D.C.
House Majority Leader Tom DeLay
(R-TX), NRCC Chairman Tom Reynolds (R-NY) and
the National Republican Congressional Committee
(NRCC) announced today that Mr. Roderick J. Lloyd
has been chosen as a 2004 Ronald Reagan Republican
Gold Medal Award winner.” View PDF
. . . . .
10/01/04 – Bankruptcies
The year 2003 showed a small improvement
with 35,057 filings. However, the figures for
the first half of 2004 already record 18,815
businesses filing for Bankruptcy protection – an increase on
the same period for the previous year.
. . .
. .
8/01/04 - Presidential Appointment.
Roderick Lloyd has been nominated to the Presidential Business Commission. Click here for more.
. . . . .
7/26/04
- Exide Technologies:
Blackstone Asks US Bankruptcy Court for
$9.3 Million Final Fees
The Exide Technologies Debtors employed The Blackstone
Group, LP, to provide financial advisory services in connection with a possible
restructuring of certain of their liabilities.
Our approach to the turnaround process at Lloyd,
. . . . .
4/30/04 - Presidential
Business Commission Selection
NRCC Chairman Tom Reynolds announced today that Roderick Lloyd of
Fort Lauderdale has been selected to represent the State of Florida on the new
Presidential Business Commission.
View PDF Press Release
View HTML Press Release
. . . . .
11/4/03 - Job Eliminations
Following our own 10/3/03 press release
on the subject of 'Layoffs', Chicago based recruiters
Challenger, Gray & Christmas, Inc., reported
yesterday that in October companies announced
plans to eliminate 171,874 positions, more than
double the announced September layoffs of 76,506.
Hardest hit were the automotive industry, who
planned to eliminate 28,363 jobs, followed by
the retail sector with 21,169 losses and the telecommunications
industry which plans to slash another 21,030 jobs.
Of even greater concern was a poll recently conducted
by Challenger which showed that 78% of the nation's
human resources executives did not expect to see
a significant upturn in hiring until the second
quarter of 2004. 11% of those polled said that
there would be no rebound in hiring at all in
2004!
10/3/03 - LBT Press Release
Florida Firm Offers Troubled Businesses an Alternative
to Layoffs Fort Lauderdale, Florida, October 3,
2003. Click here for more.
9/6/03 - The New York
Times
Job Losses Mount
The Labor Department announced yesterday that
93,000 jobs were lost in August - more than double
the 44,000 jobs lost in July. Not since World
War II has employment failed to grow for so long
a period even with the help of a recovering domestic
product. Compare this figure with our 7/3/03 posting
below.
8/18/03 - Bankruptcies
The American Bankruptcy Institute reports
today that personal bankruptcies have surged over
the last year, with more Americans filing for
protection than ever before, up from 1.4 million
for the year to June 30, 2002 to 1.6 million for
2003. A total of 440,257 bankruptcy petitions
were filed between April and June this year, surpassing
2003's first quarter all time record of 412,968.
The record shows that the culprit is excessive
debt based consumer spending. While at the same
time, we hear that consumer spending is reckoned
to be the 'engine' of the economy leading us out
of recession?
7/03/03 Washington DC - Economic Figures
June Unemployment Rate Highest in 9 Years
The Labor Department reported today that
businesses slashed 30,000 jobs last month. The
economic slump has now cost nearly a million jobs
in just the last three months. This has caused
the nation's unemployment rate to soar to 6.4%,
the highest level in more than 9 years.
6/26/03 - Job Market Worst Since Early 1990's.
The June 2003 survey by Manpower reveals that
three out of four employers expect to cut jobs
or hold off on hiring this summer, contributing
to the worst employment market since the early
1990's.
6/26/03 - Fed Lowers Interest Rate
The Federal Reserve has decided to cut its benchmark
interest rate by a-quarter of one percent. The
move means that the Fed funds rate goes down to
its lowest level since 1958.The Fed says the economy
has yet to show sustainable growth - on the contrary
there is now a real danger that the present economic
weakness could trigger a destabilizing fall in
prices. There is also the fear that ultra-low
interest rates may encourage consumers and businesses
to take on debt that will prove difficult to repay
when rates rise. It seems that the 1930's economy
may have crept up on us. A further 1/2% drop and
rates would match those prevailing in 1929/30.
If history is any guideline, by 1933 the prime
rate had plunged to 1.5%!
05/07/03 - Lead Story in Wall Street Journal,
New York Times and Washington Post
Fed fears falling prices and expresses concern
over deflation. This statement is almost a 180
degree turn from the Fed's position just two months
ago, do they really know where we are heading?
4/10/03 - Press Release Business Roundtable (BRT)
Economic Outlook Survey
BRT, comprising America’s leading
CEOs, released their survey today on the prospects
for the next six months. It reveals a weak economic
outlook and a continuingly pessimistic trend.
The major concerns were:
• Only 9% of US Companies anticipated hiring
new employees whereas 45% were planning layoffs.
• “Ample Capacity” coupled with
excess inventory is causing a collapse in business
spending – 27% of companies polled will
be reducing their investment spending over the
next six months.
• Projected quarterly earnings are at their
lowest levels for two years.
• Declining consumer confidence coupled
with rising costs are cited as the main culprits.
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