KB CASE: A federal grand jury indicted former KB Home Chief Executive Bruce Karatz on charges that he attempted to defraud the L.A. homebuilder's shareholders by awarding himself and other executives stock options that were backdated to increase their value. The indictment accuses Karatz, 63, of concealing this practice from the board and compensation committee as well as from shareholders. Gary A. Ray, a former senior vice president and head of human relations, earlier pleaded guilty to conspiring with Karatz to obstruct
MERGER ANNOUNCED: Beverly Hills Bancorp Inc., the struggling Calabasas parent of First Bank of Beverly Hills, reached a merger agreement with Orchard First Source Asset Management LLC, a debt investor headquartered in Rolling Meadows, Ill. Under the deal, Orchard First Source will merge its subsidiary, OFS Lending, into the local bank. Orchard First Source will receive about 80 percent of the bank's outstanding shares. The bank's loan portfolio became heavily weighted toward condominium construction loans and lost more than $80 million in fourth quarter.
UNION UNCERTAIN: The status of the on-again, off-again $100 million merger of Image Entertainment Inc. and Nyx Acquisitions Inc. was uncertain at the end of last week. The Chatsworth home entertainment distributor at first called off its planned acquisition by Nyx because the San Francisco investment firm failed to deposit $500,000 into a trust account for the deal's business interruption fee. But after Nyx, an affiliate of Q-Black LLC, came up with $300,000 of the amount, Image said it would give Nyx more time. Image agreed in November to sell itself to Nyx for $60.2 million in cash, plus assumption of debt.
DEBT RESTRUCTURED: Billionaire media mogul Sumner Redstone's family theater chain, National Amusements Inc., said it reached an agreement to restructure $1.46 billion worth of debt. The company said the agreement will extend the maturity of the existing debt to Dec. 31, 2010, with repayments due in late 2009 and 2010. The debt would be secured by National Amusements' assets. The announcement partially relieves an issue weighing down the shares of Viacom Inc. and CBS Corp., which Redstone controls through National Amusements.
UNEMPLOYMENT RISES: L.A. County's seasonally adjusted unemployment rate shot up to 10.5 percent in January the highest rate in 16 years as thousands of trade and retail jobs were lost amid the deepening recession. About 521,000 county residents reported being out of work last month, driving the unemployment rate up from 5.9 percent in January 2008 and 9.2 percent in December.
REDUCTIONS: Northrop Grumman Corp. expects to lay off as many as 750 workers as it consolidates administrative workers in Redondo Beach and El Segundo. In January, the Century City-based defense contractor announced it was merging its El Segundo aircraft-building unit with its Space Technology satellite-making business in Redondo Beach. Despite the expected administrative layoffs, the combined unit still has more than 850 open positions for skilled technical jobs in engineering and manufacturing.
SUIT DISMISSED: A federal judge has dismissed a claim by Gibson Guitar Corp. that controllers for the Activision Blizzard Inc. hit video game "Guitar Hero" violated a patent held by the famed guitar manufacturer. Judge Mariana R. Pfaelzer ruled Nashville, Tenn.-based Gibson's patent did not cover interactive video games. Gibson claimed that Santa Monica-based Activision and others violated a 1999 technology patent for a mixer, headset and playback device that simulate a musical performance.
EARNINGS: Public Storage reported fourth quarter net income of $152 million, 9.5 percent less than a year ago. Revenue rose 1.6 percent to $333 million. Live Nation Inc. reported a fourth quarter net loss of $338 million largely due to a goodwill impairment charge. Revenue fell 0.7 percent to $916 million. Edison International reported fourth quarter net income of $217 million, 16 percent higher than a year ago. Revenue rose 2.7 percent to $3.23 billion. Abraxis Bioscience Inc. reported a wider fourth quarter net loss of $182 million due to a one-time charge. Revenue rose 1.5 percent to $92.2 million. Move Inc. reported a fourth quarter net loss of $3.2 million. Revenue fell 8 percent to $57.5 million. Big 5 Sporting Goods Corp. reported fourth quarter net income of $3.6 million, down 42 percent from a year ago. Revenue fell 5 percent to $219 million. Entravision Communications Corp. reported a fourth quarter net loss of $136 million. Revenue fell 16 percent to $52.8 million. DTS Inc. reported fourth quarter net income of $3 million, compared with a loss of $17.9 million a year ago. Revenue rose 8 percent to $18.3 million. Crown Media Holdings Inc. reported fourth quarter net income of $1.3 million, compared with a net loss of $37.3 million a year ago. Revenue rose 8 percent to $75.2 million. K-Swiss Inc. reported a fourth quarter net loss of $13.7 million, compared with net income of $596,000 a year ago. Revenue fell 28 percent to $56.3 million.
For reprint and licensing requests for this article, CLICK HERE.