25.8% of 182 large retailers are at significant risk of filing for bankruptcy

Wall St. has already provided a list of retailers who may well not make it through 2009. According to The Wall Street Journal, "AlixPartners LLP, a Michigan-based turnaround consulting firm, estimates that 25.8% of 182 large retailers it tracks are at significant risk of filing for bankruptcy or facing financial distress in 2009 or 2010."So, which chains are at risk as the year draws to a close, especially now that holiday numbers are even worse that expected?The "easy" list that many analysts come up with includes Bon-Ton (BONT), Talbots (TLB), and Saks (SKS). These chains were mentioned in both the 24/7 Wall St. and Wall Street Journal articles.One of the most pressing issues for the industry is whether a very large retail operation will go into Chapter 11 or be sold, putting tens of thousands of people out of work with one stroke? Six months ago, that seemed very unlikely. With 2008 being the worst holiday sales period in decades and 2009 shaping up to be even worse, the number of jobs at risk has become significantly more considerable. One weak operation which could end up being sold is Gap (GPS). The company has 150,000 workers. The firm's shares were nearly $22 a year ago. They now trade under $13. Gap's chains, Gap, Old Navy and Banana Republic, have posted double digit same-store sales declines for many of the months during 2008. Friedman Billings Ramsey recently wrote that its expects sales to get worse in 2009. If that is true, Gap may not make it through the year as an independent.The other large retail operator that will almost certainly suffer double-digit same-store declines in 2009 is Sears (SHLD). It has already posted frightening numbers for most of 2008. A really hard holiday season means that the company will either have to closed hundreds of stores or perhaps eliminate one of its two huge brands--K-Mart or Sears. Over the last year, shares of Sears have dropped from a 52-week high of $114 to $37. Moody's recently warned it may cut Moody's Sears's corporate credit rating from "Ba1," one step below investment grade, according to Reuters. Sears is unlikely to go out of business by a lot of its 337,000 employees could be out of work next year.

Haven Trust Bank, Duluth, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation

Haven Trust Bank, Duluth, Georgia, was closed today by the Georgia Department of Banking and Finance, and the Federal Deposit Insurance Corporation (FDIC) was named receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Branch Banking & Trust (BB&T), Winston-Salem, NC, to assume all of Haven Trust’s deposits, including those that exceeded the insurance limit.The four branches of Haven Trust will reopen on Monday as branches of BB&T. All the depositors of Haven Trust will automatically become depositors of BB&T. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their existing banking relationship to retain their deposit insurance coverage. Customers of the failed bank should continue to use their existing branches until they receive further information from BB&T.Over the weekend, depositors of Haven Trust can access all their money by writing checks or using ATMs or debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.As of December 8, 2008, Haven Trust had total assets of $572 million and total deposits of $515 million. BB&T agreed to assume all of the deposits for $112,000. In addition to assuming all of the failed bank’s deposits, BB&T will purchase approximately $55 million of the failed bank’s assets. The FDIC will retain the remaining assets for later disposition.

US has seen the collapse of 25 banks this year, with two entities going belly up on average each month.

Reeling under a recession that's getting worse, the US has seen the collapse of 25 banks this year, with two entities going belly up on average each month.
The world's largest economy, which officially entered a recession phase in December last year, has seen the demise of three banks this month.Sanderson State Bank and Haven Trust Bank, both of which were seized by the authorities on Friday, are the latest to join the league of failed entities.Last week, First Georgia Community Bank went bust.According to data available with the Federal Deposit Insurance Corporation, an independent agency of the US government often appointed as receiver of failed banks, 25 banks failed so far this year. On average, it means two bank failures every month.Ironically, in the past eight years, 52 banks went belly up and more than half of them collapsed in the ongoing financial turmoil.As many as 27 banks went bust since September last year, when the economic crisis surfaced in the country's banking sector.The National Bureau of Economic Research (NBER) has said that the US entered a recession phase in December last year, the longest since World War II.There were five bank failures in November, making it the highest in any month this year.Among the five, three entities -- PFF Bank and Trust, Downey Savings and Loan, and The Community Bank -- folded up on November 21. The other two were Security Pacific Bank and Franklin Bank.

Investors who put their fortunes in the hands of arrested New York money manager Bernard Madoff

Investors who put their fortunes in the hands of arrested New York money manager Bernard Madoff are waiting to hear how much of their stake is left.The roster of potential victims in what prosecutors said was a $50 billion Ponzi scheme has grown exponentially longer in the past few days.Madoff, 70, said in regulatory filings that he only had around 25 clients, but it has become apparent that the list of people who lost money may number in the hundreds or even thousands.Among those who have acknowledged potential losses so far: Former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services.A charity in Massachusetts that supports Jewish programs, the Robert I. Lappin Charitable Foundation, said it had invested its entire $8 million endowment with Madoff. The organization's executive director said she doesn't expect it to survive.Other institutions that believed they had lost millions included The North Shore-Long Island Jewish Health System and the Texas-based Julian J. Levitt Foundation.Hedge funds and other investment groups looked like big losers too. The Fairfield Greenwich Group said it had some $7.5 billion in investments linked to Madoff. A private Swiss bank, Banque Benedict Hentsch Fairfield Partners SA, said it had $47.5 million worth of client assets at risk.The losses may have extended far beyond the coffers of the wealthy and powerful.The town of Fairfield, Conn., said it placed nearly 15 percent of its retiree pension fund with Madoff. Officials were scrambling to determine how much of the $42 million remained.Harry Susman, an attorney in Houston, said he represents a group of clients who had unknowingly become entangled in the scandal by investing in a hedge fund managed by Merkin, which then put almost all of its $1.8 billion in capital in Madoff's hands.
"They had no idea they had exposure," Susman said. He said his clients were now dumbfounded as to how the fund came to invest all of its holdings with just one man, especially since concerns had been circulating for years about Madoff's operations.
For decades, Madoff had dual reputations among investors. Many wealthy New Yorkers and Floridians considered him a reliable investment whiz. Others, more skeptical, had questioned whether his returns were real, pointing to the firm's secrecy and lack of a big-name auditor.But when he met privately with a family member at his firm earlier this month, something clearly was amiss.First, federal authorities say the 70-year-old Madoff surprised the unidentified family member by saying he wanted to pass out hefty annual bonuses two months earlier than usual, court papers said. Then, when challenged on the idea, he said he "wasn't sure he would be able to hold it together" if they continued the discussion at the office, and invited him to his apartment.It was the beginning of a stunning meltdown for the former Nasdaq stock market chairman.

Madoff himself described his investment business as an unsophisticated "Ponzi scheme," according to investigators who interviewed him.

Perhaps more startling than the loss was that it apparently caught regulators and investigators off guard, only coming to light last week when Madoff's own family turned him in.The core of the scheme — taking investments from one client to pay returns to another — "has been around since the beginning of time," said Marc Powers, a former Securities and Exchange Commission enforcement chief and head of the securities practice at Baker Hostetler.The firm somehow pulled off the fraud despite being subject to examination by the SEC, Powers added. "You wonder how these things escaped the normally careful review of these regulatory organizations."
The latest dose of bad news in the world of finance has left Madoff's clients "panicked," said Stephen A. Weiss, a lawyer for several dozen investors. "These people are sorrowful. These people are angry. And many are now destitute."The wave of ill will — fuel for inevitable lawsuits — was aimed at a man who had cultivated an image as a straight-shooter with a personal touch.
The day after his arrest, his company's Web site still boasted that "in an era of faceless organizations ... Bernard L. Madoff Investment Securities LLC harks back to an earlier era in the financial world: The owner's name is on the door."It went on to say "Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm's hallmark."Madoff's resume was the stuff of Wall Street legend: He founded his company in 1960 with $5,000 he earned in part working as a lifeguard on Long Island beaches while putting himself through Hofstra University Law School. It eventually became one of five broker-dealers that spearheaded the formation of the Nasdaq Stock Market, where he served as a member of the board of governors in the 1980s and as chairman of the board of directors in the early '90s.By 2001, Madoff's firm was one of the three top market makers in Nasdaq stocks and the third-largest firm matching buyers and sellers of securities on the New York Stock Exchange, according to Baron's.Investigators say Madoff's crime originated in a separate and secretive investment-advising business.Madoff apparently kept the loss a secret even from his two sons and other family members who work at the firm until he and two of them retreated to his apartment occupying the entire 12th floor of an Upper East Side building on Dec. 9, according the complaint drawn up by an arresting FBI agent.
"It's all just one big lie," he told his family. He confided he had blown the money in what was "basically, a giant Ponzi scheme," the complaint added.Several attorneys representing investors, however, have questioned how he could have acted alone, given the size of the alleged fraud and vast holdings of his firm.According to the court complaint, Madoff told his family he expected to end up behind bars, but wanted to execute his own version of a bailout package by doling out $200 to $300 million he had left to family, friends and employees. After the meeting, a lawyer for the family contacted regulators, who alerted the federal prosecutors and the FBI.
Madoff was in a bathrobe when two FBI agents arrived at his door unannounced at 8:30 a.m. on Dec. 11. He invited them in, then confessed after being asked "if there's an innocent explanation," the complaint said.
Responded Madoff: "There is no innocent explanation."

Two arrests of prominent New Yorkers alleged to be engaged in massive frauds and the arrest of a governor accused of trying to sell a U.S. Senate seat

Two arrests of prominent New Yorkers alleged to be engaged in massive frauds and the arrest of a governor accused of trying to sell a U.S. Senate seat. And if history proves consistent, there will be many more shocking disclosures to come as the world readjusts to another post-bubble era.nothing new. Excesses during bubble times lead to mistakes, big losses and ultimately the unveiling of frauds. Nobody asks questions when things are going well; they scream for justice when things head south.Bernard Madoff, a well-respected denizen of Wall Street, faces charges he defrauded investors in his advisory firm of $50 billion by running what prosecutors say he admits was nothing more than a gigantic Ponzi scheme. The alleged fraud unraveled when Madoff, who has run the business by himself for years, faced $7 billion in client redemption requests this fall. Ponzi schemes need asset inflows to work and break down when those inflows dry up.Until now, nobody asked loudly enough, however, how it was that Madoff could log such steady and consistent positive returns (reportedly always positive for years even as the markets gyrated). His investment management firm, an affiliate of his market-making brokerage operation bearing his name, had $17 billion under management as of the beginning of 2008, according to the Securities and Exchange Commission, which is pursuing separate civil fraud charges.Rival fund managers and some hedge fund due diligence firms said Friday they had wondered for years how he pulled it off, but few thought to sound alarms with regulators

58,000 commercial bankruptcies filed nationwide through November of this year exceed the year-end totals of every year

58,000 commercial bankruptcies filed nationwide through November of this year exceed the year-end totals of every year since Congress overhauled the bankruptcy laws in 2005, according to Automated Access to Court Electronic Records, an Oklahoma City bankruptcy data company.The 11-month figure is also 35 percent more than the nearly 43,000 business petitions filed in all of last year, the company's data show.
The combination of massive job losses, stagnant consumer spending, tighter credit and the subprime mortgage crisis have hammered businesses coast to coast.Victims include Lehman Brothers and Washington Mutual, the two largest corporate bankruptcies in U.S. history.Thousands of smaller companies also have been forced to liquidate or restructure through bankruptcy.They include car dealerships such as Ernie Haire Ford of Tampa, Fla., home remodeling firms such as Accurate Kitchens of Clifton, N.J., and natural gas marketers such as Catalyst Energy of Atlanta.When the recession began last December, businesses nationwide were filing an average of 206 bankruptcy petitions a day. That average has increased steadily since June, reaching 318 per day in November.