In the Region
Allegiance Bank posts 7th straight quarterly loss
Allegiance Bank of North America, Bala Cynwyd, lost money for the seventh quarter in a row in the three months that ended March 31. The latest loss was $457,000, or 10 cents per share, as the small bank continued to struggle with bad loans at a mortgage subsidiary it closed in February. Allegiance, with $106.09 million in deposits, reported $5 million in troubled loans, or 3.9 percent of total assets. Last year, those figures stood at $1.8 million, or 1.2 percent of total assets. Despite its troubles, Allegiance, which hired Gregg J. Wagner as president and chief executive officer in March, said it still has plenty of capital by regulatory standards.
- Harold Brubaker
Pilots: US Airways still hasn't resolved last merger
The pilots union for US Airways says Philadelphia's dominant carrier should focus on its last merger before discussing another tie-up with United Airlines. The US Airline Pilots Association says it's also concerned about the financial health of United parent company UAL Corp. Union president Stephen Bradford said that with its mounting losses, UAL may not make the best partner. UAL lost $537 million in the first quarter. Tempe, Ariz.-based US Airways Group Inc. was formed from America West and the former, Virginia-based US Airways in 2005. The airline has combined most of its operations, but its pilots and flight attendants are still working under separate contracts.
Resource America: Subsidiary has loan oversight
Resource America Inc. said its Apidos Capital Management L.L.C. subsidiary took over the management of four collateralized loan obligations worth $1.3 billion. "Although these transactions that we will be assuming management of have experienced many challenges in this uncertain economic environment, we believe that we are very well-suited to maximize the returns for all investors," Gretchen Bergstresser, president and senior portfolio manager of Apidos, said in a news release. Resource America is a Philadelphia specialty finance company that had $17.7 billion under management at the end of March.
- Harold Brubaker
Mortgage investor promotes director to president
Luminent Mortgage Capital Inc., a Philadelphia firm that invests in residential mortgage securities, named one of its directors, Zachary H. Pashel, president and chief executive officer. Pashel replaced S. Trezevant Moore Jr., who resigned May 9 to accept a different job, according to a regulatory filing. Pashel joined the Luminent board in September. Before becoming president of Luminent, he was executive vice president and head of structured finance at the Chotin Group Corp. of Denver. At Chotin, Pashel oversaw $6 billion in assets, mainly residential mortgage securities and collateralized debt obligations. Luminent, which nearly went out of business last year amid the credit crisis, is converting from a real estate investment trust to a publicly traded partnership.
- Harold Brubaker
Rittenhouse-area building becoming hotel complex
Kimpton Hotels & Restaurants, San Francisco, says Wachovia Bank has agreed to lend $50 million to turn the Architects Building, 117 S. 17th St., near Rittenhouse Square, into a 230-room Hotel Palomar, with a ground-floor restaurant, meeting rooms, and a fitness center, to open in late 2009. Cushman & Wakefield Sonnenblick Goldman, New York, arranged the loan for Kimpton.
- Joseph N. DiStefano
Drug company settles U.S. case over prescriptions
A Bridgewater, N.J., unit of Biovail has agreed to pay nearly $25 million to settle federal criminal charges that it illegally paid doctors so they would prescribe a blood-pressure drug. The Toronto-based pharmaceutical company and the U.S. Attorney's Office in Boston separately announced the settlement involving the 2003 launch of the drug Cardizem LA. The company said subsidiary Biovail Pharmaceuticals Inc. agreed to plead guilty and pay a total $24.6 million to settle the criminal case. Prosecutors alleged Biovail Corp. paid thousands of physicians and others up to $1,000 apiece to induce them to either prescribe or recommend Cardizem LA. U.S. Attorney Michael Sullivan's office said the investigation did not implicate the current management of Biovail in the scheme.
Key UAW unit ratifies deal with GM to end strike
A striking United Auto Workers local at a key General Motors factory in Michigan says it ratified a contract with the company and will resume production on Monday. UAW Local 602 said on its Web site that its members voted 73.5 percent for the deal. It will end a strike that began April 17 at the Delta Township plant near Lansing that makes the Buick Enclave, Saturn Outlook and GMC Acadia. About 3,300 people work at the factory making the popular vehicles. General Motors Corp. and the UAW reached a national contract agreement in the fall, but local unions negotiate work rules and other issues. A UAW local at a plant in Kansas City, Kan., remains on strike. That strike began May 5.
New transatlantic airline has OK for Paris flights
OpenSkies, a new transatlantic airline from British Airways, received regulatory approval from the U.S. Department of Transportation to begin flights between Paris' Orly Airport and New York's JFK Airport starting next month. The luxury airline will be focusing on New York-based flights to Europe and does not plan to fly to Philadelphia. OpenSkies plans to offer features such as six-foot flat beds in business class, personal entertainment units, and healthful meals. OpenSkies will initially operate one Boeing 757 with 82 seats from the British Airways fleet, and by the end of next year plans to have additional routes from Amsterdam, Netherlands; Brussels, Belgium; Frankfurt, Germany; and Milan, Italy, to New York. OpenSkies will begin selling tickets and booking flights next week via its Web site
» READ MORE: www.flyopenskies.com
or by phone.
- Linda Loyd
FAO Schwarz to open toy stores in Macy's outlets
FAO Schwarz will open toy stores in nearly 700 Macy's department stores during the next two years, the companies said. About 75 full-size FAO toy stores will open across the country in the fall, along with about 200 smaller shops of up to 300 square feet, the companies said. The FAO Schwarz gave its first Macy's store-within-a-store a trial run in Chicago late last year. There are 685 Macy's-FAO toy stores planned during the next two years.
Time Warner chairman indicates exit likely still on
Time Warner Chairman Richard Parsons suggested at the company's annual meeting that he would probably leave as expected next year, clearing the way for chief executive officer Jeff Bewkes to also become chairman. Parsons, in introducing the company's board members at the meeting in Atlanta, said that this was his "last shot at this" since "I will be the outgoing chairman after this year, probably." That would open the way for Bewkes, who took over as CEO from Parsons on Jan. 1, to also become chairman. Bewkes' employment contract allows him to elect to resign with a severance package if he isn't made chairman within a year. A Time Warner spokesman noted that nothing has been made official about Parson's tenure as chairman, which would require a decision by the board.