CLOs

Nearly two-thirds of financial institutions have no commodity-specific policies to address deforestation risks in their portfolios, including the world’s biggest asset managers, according to a report from Global Canopy cited by Investment Week (13 January, Gallagher). The report, released Thursday, showed BlackRock, Vanguard, and State Street, the top three global asset managers by assets under management, have not made public policies to avoid deforestation. In the United Kingdom, Baillie Gifford, Legal & General, Janus Henderson, and Schroders were also called out for their inaction. At COP26 last year, asset managers pledged to play a role in tackling deforestation, with roughly 30 firms with US$8.7 trillion in assets under management responding to the COP presidency request for financial institutions to take action to eliminate agricultural commodity-driven deforestation from their portfolios by 2025.

From "Global Asset Managers Taking No Action to Stop Funding Deforestation"
Abstract News © 2022 SmithBucklin

Milieudefensie, the environmental group that won a landmark court case against Shell last year, has warned 30 multinationals to cut their emissions or risk similar legal action, reports the Financial Times (13 January, Wilson). The group is the Dutch wing of Friends of the Earth. It wrote to BP, ExxonMobil, ABN Amro, ING, Unilever, Vitol, KLM, and other companies, all of which have entities incorporated in the Netherlands and large international footprints. The letter explained that recipients were being contacted because they "lead an enterprise with control over and influence on a substantial amount of" carbon emissions. "Action is a mandatory obligation," warned Milieudefensie director Donald Pols, who penned the letter. He further stated that recipients of the letter "bear a special responsibility" to take action and limit their emissions. The warning signals that the corporate world faces a new front in the battle against climate change.

From "Shell Climate Case Winner Targets Dozens More Companies"
Abstract News © 2022 SmithBucklin

Some US supermarkets are reducing hours and cutting services amid surging Omicron cases, reports the Wall Street Journal (13 January, Council, Kang). Across the country, supermarket workers are calling out sick after contracting COVID-19 or being exposed to the virus, executives and employees said. That has forced retailers to manage operations with fewer workers, even as shopper demand for groceries remains high. Some grocers said they are managing the situation by hiring new employees, using temporary employment agencies, and overscheduling available staffers. Across the board, supermarkets have struggled with hiring and retaining workers during the COVID-19 pandemic. Executives have said unemployment benefits and federal stimulus benefits made it more difficult to find workers. They also cited fears of working in public and being exposed to the virus as another reason why potential employees are reluctant to jump into the job market.

From "Supermarkets Cut Hours, Services as Omicron Infects Workers"
Abstract News © 2022 SmithBucklin

The US Census Bureau on Wednesday announced that a record 5.4 million new business applications were filed last year, reports National Public Radio (12 January, Hsu), easily topping the previous all-time high set in 2020 of 4.4 million. The surge in entrepreneurship is seemingly good news for the economy even though there's no way to tell how many of these new businesses will survive long term. For comparison's sake, there was no such surge in new business applications following the Great Recession. In 2019, the year prior to the COVID-19 crisis began disrupting the planet, there were 3.5 million new business applications.

From "New Businesses Soared to Record Highs in 2021"
Abstract News © 2022 SmithBucklin

The Financial Times (13 January, Chavez) reports Delta Air Lines will share profits with staff for the first time since the COVID-19 pandemic broke out. The decision was influenced by a sharp recovery in profits in the second half of 2021. All told, the US airline will award its staff US$108 million, which works out to US$1,250 for each employee who worked through the year. Last year, on an adjusted basis, Delta suffered pre-tax losses of US$3.4 billion and net losses of US$2.6 billion on operating revenues of US$26.7 billion. But in the fourth quarter, it made pre-tax profits of US$170 million and net profits of US$8.4 billion on an adjusted basis. Delta last shared profits with employees in the fourth quarter of 2021.

From "Delta to Share Profits with Staff for First Time Since Pandemic Began"
Abstract News © 2022 SmithBucklin

Jack Dorsey has created a nonprofit group to help developers of the original cryptocurrency who are facing "legal headaches," according to the New York Times (13 January, Livni). In an email sent to the developers' mailing list Wednesday, Dorsey, a Bitcoin supporter, wrote that "litigation and continued threats are having their intended effect" and that "individual defendants have chosen to capitulate in the absence of legal support." Accordingly, Dorsey has established the Bitcoin Legal Defense Fund, which will provide free legal advice. The fund will rely primarily on part-time and volunteer lawyers. Board members, including Dorsey and others, will review cases and determine who will receive help from the group. The fund is not seeking contributions for now, and Dorsey did not disclose how much money it had.

From "Jack Dorsey Creates a Fund to Address Bitcoin Developers' 'Legal Headaches'"
Abstract News © 2022 SmithBucklin

A bill that would ban members of Congress and their families from making stock trades while in office was introduced in the Senate Wednesday, reports the Hill (12 January, Schnell). The bill would require that all sitting members of Congress, their spouses, and their dependent children divest from certain investments or transfer them into a qualified blind trust within 120 days of the legislation being enacted. Investments in securities, commodities, futures, or any other comparable economic interests obtained through synthetic methods, including the use of a derivative, would be under the purview of the law. Lawmakers, however, would not have to divest or transfer investments in diversified mutual funds or diversified exchanges.

From "Senate Democrats Introduce Bill to Ban Stock Trades in Congress"
Abstract News © 2022 SmithBucklin

State Street Global Advisors said all global companies in which it invests must have at least one woman on their boards to gain the firm’s support during the upcoming proxy season, reports Bloomberg (12 January, Kishan). Its previous policy applied only to companies that are included in major indexes. The asset manager also said it expects women to make up at least 30 percent of boards of companies in major indexes in the United States, Canada, the United Kingdom, Europe, and Australia for the 2023 proxy voting season, according to a letter posted Tuesday on its website.

From "State Street Expects Companies to Have Women on Their Boards"
Abstract News © 2022 SmithBucklin

A sentencing date for former Theranos CEO Elizabeth Holmes has been set for 26 September, according to an order from US District Judge Edward Davila seen by National Public Radio (12 January, Allyn). Earlier this month, a jury convicted Holmes of four fraud-related charges in connection with the collapse of her former blood-testing company, Theranos. The maximum possible penalty she could receive is 20 years in federal prison. However, legal experts expect Davila, who has overseen her case, to hand down a much less severe punishment. Among them is Amanda Kramer, a former federal prosecutor who now practices as a white-collar defense lawyer. She said Davila will consider investors' loss amount, Holmes' character and background, her efforts at rehabilitating since, and how the punishment could deter others from engaging in similar fraud.

From "Former Theranos CEO Elizabeth Holmes to Be Sentenced on 26 September"
Abstract News © 2022 SmithBucklin

Deutsche Bank has sued Apollo Global Management, Elliott Investment Management, and other investors in distressed corporate debt for allegedly making false claims about its role in a US$725 million loan to SunEdison before the energy company filed for bankruptcy, according to Bloomberg (12 January, Larson). Deutsche Bank Securities, which helped arrange the credit facility in 2016 and was sued two years later for allegedly duping the creditors into the loan, said investors that also include Highbridge Capital Management and Cerberus Capital Management are falsely claiming they relied on the German company’s analysis of SunEdison before making the loan. Deutsche Bank “now faces hundreds of millions of dollars in alleged liability and has already incurred millions of dollars in foreseeable fees and costs to defend itself,” it said in a new complaint.

From "Apollo, Elliott Sued by Deutsche Bank in SunEdison Loan Feud"
Abstract News © 2022 SmithBucklin

A federal court ruling in the United States made public last week establishes that gruyère cheese can be made anywhere, reports the New York Times (13 January, Gross). That stands in contrast to Swiss guidelines, which dictate that gruyère must be made in the region around Gruyères, Switzerland. The US court ruling marks the latest development in a long-running legal dispute between US cheese producers and producers in Switzerland and France. US Judge T.S. Ellis III ruled that "[a]lthough the term gruyère may once have been understood to indicate an area of cheese production, the factual record makes it abundantly clear that the term gruyère has now, over time, become generic to cheese purchasers in the United States." Under US law, trademarks cannot be given to generic terms. But gruyère producers in Switzerland and France have vowed to appeal the decision.

From "Is Gruyère Still Gruyère if It Doesn’t Come From Gruyères?"
Abstract News © 2022 SmithBucklin

The US Supreme Court on Thursday blocked the Biden administration from enforcing a vaccine-or-testing mandate for large employers, reports the New York Times (14 January, Liptak). In doing so, the court dealt a major blow to a key element of the White House's plan to address the pandemic amid surging cases linked to the Omicron variant. But in a modest victory for US President Joe Biden, the Supreme Court allowed a more limited mandate requiring healthcare workers at facilities receiving federal money to be vaccinated. The vote in the employer mandate case was 6-to-3, with the liberal justices in dissent. The vote in the healthcare case was 5-to-4, with Chief Justice John Roberts and Justice Brett Kavanaugh joining the liberal justices to form a majority. The employer decision undercut one of President Biden's most significant attempts to curb the coronavirus, leaving large companies to navigate a patchwork of state laws and policies instead. In both the employer and health worker cases, the justices explored whether Congress had authorized the executive branch to take sweeping actions to address the healthcare crisis. The unsigned majority opinion in the employer case said a statute on workplace hazards did not justify a mandate that would have impacted more than 80 million workers. But it did leave the door open for more tailored regulations by industry.

From "US Supreme Court Blocks Biden’s Virus Mandate for Large Employers"
Abstract News © 2022 SmithBucklin

Though millions of Americans are scrambling to find COVID-19 tests, a select group of employees at the country's largest companies have access to a large stockpile of free tests, reports the New York Times (12 January, Goldberg, Hirsch, McCabe). Without an adequate federal system for developing and distributing rapid tests, companies have put their own testing services in place. Google, for example, will send full-time employees in the United States free at-home tests that deliver results within minutes. Similarly, JPMorgan has an internal company site where employees can order at-home rapid tests. Some companies are using the tests to call their employees back to the office, while others are offering ready access to tests as a wellness benefit. The testing available to a small number of white collar professionals underscores the difference between their pandemic experience and that of other Americans.

From "Why Some Workers Are Getting All the COVID-19 Tests They Need"
Abstract News © 2022 SmithBucklin

A Denver County District Judge has ruled in favor of the Denver Broncos in a case complicating efforts to sell the team to a new owner, reports the Wall Street Journal (12 January, Beaton). A Canadian holding company called ROFR Holdings wrote to the Broncos in 2020, claiming that if the team were sold, it held the rights of first refusal on a potential sale. The claim stemmed back to the 1980s, when Pat Bowlen bought the Broncos from Edgar Kaiser. First refusal rights were given to Kaiser as part of the deal. Both Bowlen and Kaiser have since died, but before his death Kaiser tried to transfer the rights to ROFR Holdings, which was owned by his estate and a business called Twelve LLC. The Broncos went to court to challenge ROFR Holdings' claim, arguing the rights of first refusal were improperly transferred and no longer legitimate. The judge agreed, clearing a critical roadblock for the team as it explores its ownership situation.

From "Court Ruling Sets the Stage for a Possible Denver Broncos Sale"
Abstract News © 2022 SmithBucklin

Cathay Pacific Chair Patrick Healy on Tuesday evening hit back at claims that the airline is responsible for Hong Kong's first Omicron coronavirus outbreak, reports the Financial Times (12 January, Chan, Riordan). Carrie Lam, Hong Kong's chief executive, has ordered an investigation into Cathay in connection with crew violating pandemic regulations. On Tuesday, she warned that the airline could face legal action over the matter. But Healy said in a video to staff released Tuesday night that the "noncompliance of a tiny minority should not be allowed to overshadow the remarkable discipline and professionalism of the overwhelming majority of Cathay Pacific crew over so many months." Healy said crews spent more than 73,000 nights in quarantine facilities in 2021 to prevent community infections.

From "Cathay Pacific Hits Back After Being Blamed for Hong Kong Omicron Outbreak"
Abstract News © 2022 SmithBucklin

Marco Cavaleri, the head of vaccines strategy for the European Medicines Agency (EMA), on Tuesday expressed doubts about the need for a fourth dose of the COVID-19 vaccine, reports Reuters (11 January). "[R]epeated vaccinations within short intervals would not represent a sustainable long-term strategy," Cavaleri said, adding that there is currently no data to support the need for another booster shot. He speculated that a strategy of giving boosters every four months hypothetically poses the risk of overloading people's immune systems and leading to fatigue in the population. The EMA said it is currently in talks with vaccine developers in case there is need for an updated version of the coronavirus vaccine, but added that any such change would need to be coordinated globally.

From "EU Drug Regulator Expresses Doubt on Need for Fourth Booster Dose"
Abstract News © 2022 SmithBucklin

Fatih Birol, the head of the International Energy Agency (IEA), on Wednesday accused Russia of restricting gas supplies to Europe, reports the Financial Times (12 January, Sheppard), implying Moscow has manufactured an energy crisis for political gain. Birol said the IEA believes Russia is holding back at least one-third of the gas it could feasibly send to Europe, while simultaneously draining Russian-controlled storage facilities on the continent to give the impression of tight supplies. "I would note that today's low Russian gas flows to Europe coincide with heightened geopolitical tensions over Ukraine," Birol said. His comments come as households in the United Kingdom and Europe are bracing for steep increases in their energy bills after wholesale gas and electricity prices soared to record levels.

From "IEA Chief Accuses Russia of Worsening Europe's Gas Crisis"
Abstract News © 2022 SmithBucklin

Citigroup will exit its consumer banking business in Mexico, reports the New York Times (11 January, Flitter). The bank had more branches in Mexico than in any other country, but its operations there — while extremely profitable — were plagued by scandal. Citi announced Tuesday it will either sell or take public Banco Nacional de México, better known as Banamex. Citi bought Banamex in 2001 for US$12.5 billion. In 2014, Banamex revealed that one of its most important clients had defrauded the bank of US$400 million and that, in a separate matter, bodyguards working for bank employees were taking kickbacks from some of the bank’s vendors. In 2015, federal banking regulators and California fined a related, US-based Citi subsidiary, Banamex USA, US$140 million for failing to have adequate anti-money-laundering controls in place.

From "Citigroup Seeks a Split From a Mexico Business That Brought It Riches and Scandal"
Abstract News © 2022 SmithBucklin

Delta Air Lines and the Association of Flight Attendants-CWA are fighting over the company's new isolation policy for workers who test positive for COVID-19, according to the New York Times (12 January, Chokshi, Hirsch). Delta's chief legal officer wrote to the union last week, saying the union had posted "false and defamatory information" about the company’s policies and asking it to correct those statements and stop repeating them. The union, which represents nearly 50,000 flight attendants at 17 airlines and is seeking to unionize Delta’s flight attendants, responded on Tuesday that its statements had been “truthful and accurate.” The dispute is related to Delta's adherence to a recent change by the US Centers for Disease Control and Prevention (CDC), which shortened the recommended isolation time to five days for people who are vaccinated and who get the virus, so long as their symptoms are resolving and they have no fever. Sara Nelson, the union's president, said the policy puts Delta workers at risk.

From "Delta Air Lines and a Union Spar Over Isolation Periods for Sick Workers"
Abstract News © 2022 SmithBucklin

Thousands of Kroger workers went on strike in Denver, reports the Wall Street Journal (12 January, Kang), marking the latest push by employees to gain higher wages, more benefits, and safer workplaces. Roughly 8,400 unionized workers at Kroger's King Soopers stores in Denver walked off the job Wednesday morning, according to Kroger and the United Food and Commercial Workers Local 7 union. A Kroger spokesperson said the strike is impacting 77 out of 151 total King Soopers locations. The company said it was "reckless and self-serving" for the union to strike, and vowed to keep its stores open. Kroger has hired temporary workers to help staff stores and brought employees in from other parts of the country. Union officials have previously said they want to secure a new contract with better wages, health and retirement benefits, and a guarantee of safer work environments for employees.

From "Kroger Supermarket Workers Go on Strike in Denver"
Abstract News © 2022 SmithBucklin