07.24.09
Posted in .com, Free blog Tips, news, online, shortly tagged business, finance, newsreports, personal, political at 11:59 pm by carydalton
NEW YORK (Reuters) – Guaranty Financial Group Inc (GFG.N), the second-largest publicly traded bank in Texas, said it will probably fail after loan losses and write-downs
left it "critically" short of capital.
The bank, whose investors include Carl Icahn and Robert Rowling, is in talks with at least one investor group for a possible recapitalization, said a source familiar with the situation. The source requested anonymity because the talks are not public.
"The company believes that it is probable that it will not be able to continue as a going concern," Guaranty said in a regulatory filing.
The Austin-based lender has about $16 billion of assets and more than 150 branches in Texas and California, according to its website.
On that basis, if it were to fail, Guaranty would be the largest U.S. bank to collapse in 2009. Guaranty is about half the size of IndyMac Bancorp Inc (IDMCQ.PK), which failed last July.
So far 64 banks have failed this year, including seven on Friday, according to the Federal Deposit Insurance Corp. Friday's failures include six bank subsidiaries of Security Bank Corp of Macon, Georgia.
In a regulatory filing late on Thursday, Guaranty said it has been unable to obtain new capital from shareholders, and believes it will be ineligible for help from U.S. regulators.
Its largest investors include companies run by billionaire Carl Icahn and by Rowling, whose investment firm owns the Omni Hotels chain.
Guaranty said it does not expect to raise enough capital to comply with an April cease-and-desist order from the federal Office of Thrift Supervision (OTS).
It said losses and write-downs have left it "critically undercapitalized," with negative capital ratios credit report.
Guaranty also said it has agreed to an OTS demand for the appointment of the Federal Deposit Insurance Corp as a receiver or conservator. That appointment has not yet happened, but the OTS is exercising "a significant degree of control" over what had been functions of the board of directors, Guaranty said.
The company has not filed official results since the third quarter of 2008. It has estimated it lost $444 million in all of 2008 and another $256 million in the first quarter of 2009.
Chief Marketing Officer John Wessman said in a statement that Guaranty is still working with regulators, and believes it can avoid disruptions to customers.
Guaranty's largest investors include Rowling's investment firm TRT Holdings Inc, which has a 19.9 percent stake according to a regulatory filing. A company run by Icahn has a 17 percent stake, Reuters data shows.
Icahn and Rowling did not immediately return calls for comment.
Guaranty began operations in 1988, according to its website. It was spun off in December 2007 by Temple-Inland Inc (TIN.N), a corrugated packaging and building products company.
The largest publicly traded bank based in Texas is Dallas-based Comerica Inc (CMA.N).
Guaranty shares closed down 7 cents, or 32 percent, at 15 cents on the New York Stock Exchange on Friday. Their 52-week high is $6.75, set last September 18.
(Reporting by Jonathan Stempel and Paritosh Bansal; Editing by Matthew Lewis, Gary Hill, Tim Dobbyn and Richard Chang)
Guaranty Financial, No.2 Texas bank, says may fail
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Posted in business, economic, hot news, online, top tagged business, campaign, economics, marketing, writing at 8:48 am by carydalton
Taking a new hard line that news articles should not turn up on search engines and Web sites without permission, The Associated Press said Thursday that it would add software to each article that shows what limits apply to the rights to use it, and that notifies The A.P. about how the article is used.
Tom Curley, The A.P.’s president and chief executive, said the company’s position was that even minimal use of a news article online required a licensing agreement with the news organization that produced it. In an interview, he specifically cited references that include a headline and a link to an article, a standard practice of search engines like Google, Bing and Yahoo, news aggregators and blogs.
Asked if that stance went further than The A.P. had gone before, he said, “That’s right.” The company envisions a campaign that goes far beyond The A.P., a nonprofit corporation. It wants the 1,400 American newspapers that own the company to join the effort and use its software.
“If someone can build multibillion-dollar businesses out of keywords, we can build multihundred-million businesses out of headlines, and we’re going to do that,” Mr. Curley said. The goal, he said, was not to have less use of the news articles, but to be paid for any use.
Search engines and news aggregators contend that their brief article citations fall under the legal principle of fair use. Executives at some news organizations have said they are reluctant to test the Internet boundaries of fair use, for fear that the courts would rule against them.
Mr. Curley declined to address the fair use question, or to say what action The A.P. would take against sites that use articles without licensing.
“We’re not picking the legal remedy today,” he said. “Let’s define the scope of the problem.”
News organizations already have the ability to prevent their work from turning up in search engines — but doing so would shrink their Web audience, and with it, their advertising revenues. What The A.P. seeks is not that articles should appear less often in search results, but that such use would become a new source of revenue.
Gabriel Stricker, a spokesman for Google, said, “We believe search engines are of real benefit to news publishers, driving valuable traffic to their Web sites and connecting them with readers around the world paydayloan.” Some news executives agree and contend that a confrontation with search engines is misguided.
The new program, approved Thursday by The A.P. board, is being introduced in stages that reach into next year. It follows through on a statement the company made in April vowing to take on digital piracy not only on its own behalf, but also as the agent for the embattled newspaper industry.
Each article — and, in the future, each picture and video — would go out with what The A.P. called a digital “wrapper,” data invisible to the ordinary consumer that is intended, among other things, to maximize its ranking in Internet searches. The software would also send signals back to The A.P., letting it track use of the article across the Web.
Newspaper executives have said that by taking the lead, The A.P. ensures a unified approach, saves publishers from having to design their own software and circumvents possible charges of collusion against the papers.
Some popular news aggregators like The Huffington Post and Google News have licensing agreements, paying The A.P. for the use of its material. But no comparable agreements cover general Internet searches that turn up news articles with a variety of other results.
Executives at newspapers and other traditional news organizations have long complained about how some sites make money from their work, putting ads on pages with excerpts from articles and links to the sources of the articles.
Another complaint is that a link to an article sometimes leads to another secondhand user, not the original source, which can deprive the creator of some of the audience for its own site and the ads on it. Some less-well-known sites reprint articles outright, or large parts of them, without permission, a clearer copyright violation. But there is little consensus on how extensive that problem is for news organizations.
A.P. Cracks Down on Unpaid Use of Articles on Web
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