daily briefing

daily briefing

January 10, 2009

Health coverage is said to eat up jobless aid

A report issued yesterday by the consumer health group Families USA finds that the average cost for family health insurance coverage eats up almost 84 percent of monthly unemployment benefits. The study looked at Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage, which allows a laid-off worker to retain employer-sponsored insurance but without the business contributions. That makes coverage much more expensive for individuals. On average, national unemployment benefits are $1,278 a month, compared with family COBRA premiums of $1,069 - or 83.6 percent of those benefits. In Maryland, the average monthly benefit is $1,340, compared with a COBRA cost of $1,058 - 79 percent of the total.

David Kohn

Circuit City in talks with two parties

RICHMOND, Va.: Circuit City Stores Inc. said yesterday that it is in talks with two parties that could buy the company or provide additional financing for it to stay in business. Circuit City, the nation's second-largest electronics retailer after Best Buy Co., filed for Chapter 11 bankruptcy protection in November as it faced pressure from vendors, heightened competition and waning consumer spending. Its Canadian operations filed for similar protection. The Richmond, Va.-based company filed a motion Monday under seal with the U.S. Bankruptcy Court seeking approval for its sale as a going concern, either as separate units or as individual assets. Circuit City said that the "highly motivated and interested parties" it is talking with, which it did not name, are considering providing additional financing to allow the company to sustain operations and restructure. The parties have substantially completed due diligence, the company said.

Associated Press

Verizon Wireless buys Alltel for $5.9 billion

LITTLE ROCK, Ark. : Verizon Wireless completed its $5.9 billion purchase of Little Rock, Ark.-based Alltel Corp. yesterday, making Verizon the nation's largest mobile phone company. Verizon said it will also take on $22.2 billion in Alltel debt. Basking Ridge, N.J.-based Verizon said it will retain all Alltel employees below the executive level as the company assesses which positions need to be cut or kept under the new arrangement. When Verizon President and Chief Executive Lowell McAdam addressed an audience in Little Rock in August, he said it would take a year after closing the sale to assess employee retention. The purchase is expected to result in the loss of many of the best-paying positions among the nearly 3,000 employees at Alltel's headquarters. Verizon Wireless is a joint venture between Verizon Communications Inc. of New York and Vodafone Group PLC of Britain.

Associated Press

Merisant Worldwide files for bankruptcy

WILMINGTON, Del: . Merisant Worldwide Co. filed for Chapter 11 bankruptcy protection yesterday. The Chicago-based company, whose subsidiaries include Equal maker Merisant Co., entered bankruptcy protection with assets of $331.1 million and total debt of $560.7 million, according to filings in U.S. Bankruptcy Court in the District of Delaware. The company said in the filings that its board decided seeking bankruptcy protection was in the best interest of the company. Chief Executive Paul Block said in a statement the goal is to restructure the company's balance sheet, not its business. "We've already taken aggressive steps to cut costs and make Merisant more efficient," he said, "and we don't intend to make any job cuts as a result of this filing."

Associated Press

Dec. sales declined, Best Buy reports

Best Buy Co., the largest U.S. electronics chain, said yesterday that December sales dropped after holiday discounts failed to draw shoppers. Revenue from stores open at least 14 months declined 6.5 percent. Total sales rose to $7.5 billion in the month, the Richfield, Minn.-based company said. The chain lopped $10 off Apple Inc.'s iPhone about a week before Wal-Mart Stores Inc. started selling the device. Last month, Best Buy said it would open fewer locations in the U.S., Canada and China to cut 2009 capital spending in half. About 500 corporate workers have agreed to take buyout packages, spokeswoman Sue Busch said. The decline in sales at Best Buy "is consistent with the drop in big-ticket spending," said David Schick, an analyst with Stifel Nicolaus & Co. in Baltimore. Best Buy reported that the overall consumer electronics segment, which made up 44 percent of December's domestic revenue, showed an 8.7 percent decline in same-store sales.

Bloomberg News and Associated Press

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