Thursday June 1st, 2006
by: Ed Mayberry, June 1, 2006 5:06:00 am
Vinson & Elkins, which was one of the outside law firms used by Enron, has agreed to pay the company $30 million. That's to settle claims of contributing to the failed energy giant's 2001 collapse by signing off on fraudulent or shaky deals. The firm once earned up to $40 million annually from Enron before the disgraced company cratered. It admitted no liability in the settlement. A partner in the Houston-based firm says V&E met its professional obligations in its representation of Enron and decided to settle the matter in order to avoid the burdens of prolonged litigation. The settlement is subject to approval by U.S. bankruptcy judge Arthur Gonzalez in New York. Enron spiraled into bankruptcy proceedings in December 2001 upon revelations of hidden debt, inflated profits and accounting tricks. The collapse obliterated $60 billion in market value.
State Farm--the largest home insurer in Texas--wants to raise premiums under new rate filings submitted by the company. But the company also says it plans to reduce auto premiums and increase the discount some homeowners get for multi-line policies. The company filed three new rate proposals yesterday with the State Department of Insurance: two increases for homeowners and a reduction for auto policy holders. The first was a 9.1 percent average statewide increase to cover the rising expenses related to re-insurance, which is the coverage insurance companies buy to protect against large or unexpected catastrophes. The second would be a statewide average boost of 10.7 percent based on what the company says it will need to cover projected claims and expenses. The re-insurance increase could be as much as an average 39 percent rate hike in Harris County and 36 percent in Galveston County. The rates will increase August 1st for new customers and upon renewal for existing customers starting October 1st.
Officials believe lightning caused an early morning fire today at a Valero Energy refinery storage tank in the Corpus Christi area. The tank contained oil and water and burned for three and a half hours, beginning at one this morning. But officials say no one was injured. A spokeswoman for San Antonio-based Valero says there's still no assessment of the impact on production or repairs that will be needed. Company emergency responders extinguished the fire with the help of the refinery terminal fire company, the port fire boat, a nearby ship and area tugs. Geoff Atwood, chief of the privately run refinery terminal fire company, says oil cleanup was underway today in port waters.
After posting a decline in April, the Monster Employment Index is on the rise again. The increase of four points last month shows more online job recruitment and related job opportunities. Year-over-year, the index is up 33 points, or 25 percent. Several industries showed higher levels of online demand as summer approached, including accommodation and food services; agriculture, forestry, fishing and hunting; and utilities. However, online demand for a variety of business and professional services occupations edged lower. Among them are legal; management; business and financial operations; and architecture and engineering.
The Labor Department says the number of Americans filing first-time claims for jobless benefits rose by 7,000 last week to a seasonally adjusted 336,000. Analysts had been expecting a decline. At the same time, the less volatile four-week moving average rose by more than 27,000 last week to more than 333,000. That's the highest level since late October 2005. The release comes a day ahead of the monthly employment data due from the government. Economists expect the may unemployment rate to hold steady.
Purchasing executives report the manufacturing sector grew in May at a slightly slower pace. The Institute for Supply Management main index is put at 54.4 percent, down nearly three points from the previous month. Any number above 50 indicates growth. The group's members continue to worry about rising prices, led by the costs of raw materials. That concern is also reflected in a sharp increase in the ISM's prices index. The group says new orders, production and employment were all expanding. However, deliveries were slowing and inventories were contracting.
Consumers were spending in fine form last month, based on the latest figures coming from major chains. Individual winners include Nordstrom, Federated Department Stores, J.C. Penney, Limited Brands and Bebe Stores. One analyst notes ''some very nice surprises,'' particularly among clothing sellers. Wal-Mart, however, has felt a pinch from gasoline prices. The world's largest retailer reports a 2.3 percent gain in sales at stores opened at least a year, known as same-store sales. Shoppers have generally remained resilient despite gasoline prices around $3 a gallon. The fear remains that they'll cut back their spending as the summer driving season kicks into gear. Shoppers also face mounting pressures from higher interest rates as well as a cooling housing market.
The government says construction activity declined for the first setback in ten months in April. Residential homebuilding dropped by the largest amount in more than two years. The Commerce Department says total construction spending eased by one-tenth of one percent in April. Much of the weakness reflects a 1.1 percent drop in residential construction, the biggest drop in this sector since January 2004. The report marks another sign that the nation's five-year housing boom has cooled. Indeed, another report, from the National Association of Realtors, says pending home sales fell for a third straight month in April. It tracks sales of previously owned homes where a contract has been signed but the deal has not yet gone to closing.
More Texans are signing up to get licensed as real estate agents because of booming real estate sales, according to the Real Estate Center at Texas A&M University. Texas lags behind California, Florida and New York in total active licensees, among the larger states, but the number's been growing since 1997. Texas has 100,000 active real estate licensees, but California has four times that number.
Credit the American worker. The government says productivity rebounded at a solid rate in the first three months of the year. Wages posted a solid gain as well. The Labor Department says productivity, a key factor in rising living standards, rose at an annual rate of 3.7 percent in the first quarter. That's better than the 3.2 percent increase initially estimated a month ago. There was news of some relief in inflation pressure. Unit labor costs rose 1.6 percent in the quarter. That's down from the previous estimate of 2.5 percent. Both revised figures would help the Federal Reserve more strongly consider a pause in hiking interest rates. Financial markets have been volatile in recent weeks amid fear that the central bank feels compelled to keep raising rates longer than previously expected. The next policy-setting session looms at the end of this month.
Houston-based Service Corporation International says stockholders of Alderwoods Group have approved the merger agreement between the two companies, according to the Houston Business Journal. SCI announced in April that it would acquire the rival funeral and cemetery services company for around $856 million.
Houston-based petroleum engineering services provider EnGlobal has completed the acquisition of WRC Corporation, a privately-held firm based in Denver, with Houston facilities. WRC provides land management, engineering and related services to the pipeline, power and transportation industries. WRC has become a wholly-owned subsidiary of EnGlobal.
AT&T is introducing television service in Houston in July and August, according to the Houston Chronicle. AT&T CEO Edward Whitacre told a conference in New York that the San Antonio-based company may be able to persuade customers to switch from cable TV operators.
The state of Texas is getting a $90 million federal Homeland Security grant, but that's $39 million less than it received in 2005. Nationwide, some $757 million was allocated in Urban Security Initiative Allocations, with Houston receiving about $17 million. Governor Rick Perry says he's dismayed that Texas would see a 31 percent reduction in funding for homeland security when the state "shares a 1,200-mile porous border" with Mexico.
State officials say that a free fuel plan unveiled to the public by a state official was incorrect and not approved by top emergency leaders. The plan was outlined Tuesday at the Houston/Galveston hurricane workshop for about 500 people, most of them Harris County residents. But state officials said yesterday that they were unfamiliar with the free fuel system described by Jennifer Hawes, a regional liaison officer with the Texas Department of Public Safety. A spokeswoman for Governor Rick Perry says the information Hawes presented was incorrect and the situation is being dealt with by the Division of Emergency Management. Hawes had said Tuesday that vehicles running low on gas would have access to free pumps. She said drivers looking to top off would be sent to pay at other stations. The possibility of a non-existent free fuel plan surprised and scared many state agencies and industry officials. They say riots could break out if people showed up expecting free gas.
Woodlands-based BPI Management has created a Web portal specifically for real estate investors. It features layered mapping tools based on GoogleEarth and Geographical Information system technology, links to pertinent zoning and tax information, pricing, amenities and flood maps. BPI launched a separate Website April 10th to attract home buyers to the region to list free and make their properties available for real estate investor reviews. Homeowners in the devastated hurricane region can also access a Website to list their properties in their current conditions for free. By registering online, homeowners will receive bids from five separate investors, all interested in purchasing the property.
Avenue Community Development Corporation and Holy Name Church are sponsoring the 2006 Welcome Home Fair this Sunday afternoon on Marion at the corner of Hogan. The free home ownership fair will offer educational resources on ownership opportunities, available homebuyer assistance and opportunities to build wealth through home ownership.
Marine contractor Cal Dive International plans to go public in an initial offering of stock worth as much as $350 million. Details about the number of shares to be offered or an estimated price range for the IPO weren't disclosed in yesterday's filing with the Securities and Exchange Commission. Proceeds will be used partly for general corporate purposes. The rest will be distributed to Cal Dive's parent company as a dividend. The Houston-based company is a subsidiary of Helix Energy Solutions Group. It provides manned diving, pipe-laying and pipe burial services to the offshore oil and natural gas industry. Cal Dive said it plans to list its common stock either on the New York Stock Exchange or the Nasdaq stock market. For the three months ended March 31st, it posted net income of $30.8 million. That's almost five times the net income reported for the year before.
Six black fraternities and sororities are suing Converse. They claim the shoe company used their colors and founding dates on sneakers without permission. The lawsuit in federal court claims trademark infringement and unfair competition over Converse's Greekpak basketball shoes, which it began selling in 2003 but isn't selling anymore. A man who is a Dallas patent attorney and Alpha Phi Alpha leader says "Converse is using our trademark just as if they were to put Coca-Cola's marks on a shoe of theirs without asking to use it.'' A Converse spokeswoman said in a statement that the company wants to resolve the matter but did not comment on the specific allegations. The company has said the Greek traditional colors and founding years are not trademarked. The fraternities and sororities contend that together those marks are recognized as belonging to the fraternity or sorority and should be protected by law even without trademark registration.