REVIEW
August 15 – 21
Money Pit: California will borrow $3 billion in notes next month to cover cash needs, an amount that may grow if the state can’t sell $14.7 billion in bonds to fill a record deficit. State Controller Steve Westly said the $3 billion in revenue anticipation notes, which have to be paid in less than a year, should cover projected cash needs for the fiscal year ending June 30. Last year, California sold $12.5 billion of notes, the largest in the state’s history.
Pump Pain: L.A. gasoline prices up for the week ended Aug. 18 to $1.922 a gallon for self-serve regular, from $1.721 the previous week. Several factors were cited for the price hike, including refineries being shut down for repairs and the diversion of fuel to Phoenix, which faces a gasoline shortage due to the shutdown of a supply line from California. Prices are not expected to decline for at least several weeks.
Recall News: U.S. District Judge Stephen Wilson refused to postpone California’s Oct. 7 recall election of Gov. Gray Davis, rejecting claims by a civil rights group that error-prone voting machines might distort the outcome. Wilson said the election should take place as scheduled. The American Civil Liberties Union and other groups had sued to delay the vote, arguing that six urban counties need more time to replace punch-card voting machines to ensure a fair election. The ACLU will appeal Wilson’s decision to the 9th U.S. Circuit Court of Appeals. Several lawsuits have sought to stop or delay the election. The California Supreme Court refused to review five cases.
Loan Woes: Hotelier Ian Schrager, mired in financial troubles, has filed for Chapter 11 bankruptcy protection for his Clift Hotel in San Francisco. A spokesman said Schrager’s company has obtained loans to refinance the Clift’s debt but filed for Chapter 11 protection because the debt was about to come due. The hotel continues to operate. Schrager, who operates L.A.’s Mondrian Hotel, was recently granted a two-year extension on $285 million in loans that had come due.
Avery Update: Pasadena-based label maker Avery Dennison Corp. and its competitor Bemis Co. received subpoenas from the Justice Department as part of an investigation of competitive practices in the label industry. The government’s investigation was first disclosed in the wake of a proposed acquisition of Bemis’s sticker unit by UPM-Kymmene Oyj.
Burger Deal: Earvin “Magic” Johnson and his partners sold their majority stake in Fatburger Holdings Inc. to an investment group led by the restaurant chain’s chief executive, Keith Warlick. Johnson Development Corp. didn’t disclose terms of the sale of the closely held chain. Johnson and his partners acquired their share of Fatburger in 2001. A difference of opinion regarding the direction of Fatburger led to the sale, Johnson said.
Film Fuss: After a year-long investigation, Cody Cluff, the former head of the Entertainment Industry Development Corp., was indicted by a Los Angeles County Grand Jury on 11 counts of embezzling money from the film-permitting agency. Cluff pleaded not guilty, as did current EIDC General Manager Darryl Seif, who was charged with two counts of forgery.
Edison OK: As expected, the California Supreme Court ruled that Edison International Inc.’s 2001 settlement with California regulators that kept the company’s utility unit out of bankruptcy was legal. The court ruled against consumer groups that claimed the agreement was illegal because the public didn’t get to comment before it was adopted.
PREVIEW
August 25 – 31
Dog Days: Don’t assume folks will be in the office this week. Labor Day weekend (30th-31st) marks the unofficial end of summer and there will be lots of absences in the days leading up to Monday’s holiday, when all offices will be shut down. L.A. City Hall is pretty much on holiday but Sacramento lawmakers will be at work for much of the week.
Economic Reports: Dog days or no, there are a lot of numbers coming out this week. Monday (25th): July homes sales (existing). Tuesday (26th): July new home sales, the Conference Board’s August consumer confidence numbers and July durable good orders. Thursday (28th): second-quarter preliminary gross domestic product. Friday (29th): July personal income and personal spending and August’s University of Michigan consumer sentiment data and the Chicago Purchasing Managers Index.
Sports Beat: The Dodgers are home for a weekend series (29th-31st) against Colorado. The Sparks are home on Monday (25th) against Houston and the Galaxy is at home on Saturday (30th) against Dallas.
Gemstar Rebuilding: Jeff Shell, chief executive of Gemstar-TV Guide Inc., is the featured speaker on Thursday (28th) at a breakfast meeting of the Los Angeles Area Chamber of Commerce at the chamber’s offices (350 South Bixel St.). Shell will speak about turning around the Los Angeles-based parent of TV Guide. For information: 213-580-7594.
More Festivals: This weekend (29th-31st) it’s Fiesta de San Gabriel (428 South Mission Drive), which celebrates the founding of the San Gabriel Mission in 1771. It is the oldest festival in Los Angeles County. For information: 626-457-3048. On Saturday and Sunday (29th and 30th), radio station KKJZ (88.1) hosts the 24th Annual Long Beach Blues Festival on the campus of Cal State Long Beach. The all-day concerts will feature Charlie Musselwhite, Al Green, Joe Cocker, Billy Preston and others. For information: 562-597-8453. Also in Long Beach on Labor Day weekend (29th-31st) is E Hula Mau at the Long Beach Performing Arts Center. The event is billed as Southern California’s only hula and chant competition. For information: 562-436-3661.
