Daily Briefing


December 31, 2009

Canadian regulator OKs Nortel unit sale to Ciena

Canadian regulatory authorities on Wednesday approved Ciena Corp.'s $769 million planned purchase of a subsidiary of Nortel Networks Corp. Ciena outbid rivals last month to acquire Nortel's Metro Ethernet Networks division in a deal that would make the Linthicum-based company North America's largest purveyor of fiber-optic networking gear and the third largest in the world. Ciena and Nortel, which is based in Canada and operating under bankruptcy protection, needed to receive approval from that country's Minister of Industry for the deal to go through. In a statement Wednesday, Canada's Minister of Industry, Tony Clement, said he approved the deal because he was satisfied it would be a "net benefit" for that country. The Nortel division has about 1,400 employees in Canada, and Ciena has previously said it expected to keep most of the workers employed there and would not relocate them to the U.S.

- Gus G. Sentementes

Treasury to send GMAC $3.8B for bad mortgages

WASHINGTON - The U.S. Treasury said Wednesday that it will inject an additional $3.8 billion into troubled lender GMAC, part of a deal that will boost the federal government's stake to 56 percent and attempt to staunch the company's losses from bad mortgages. All of the money injected by the Treasury will essentially go to shoring up GMAC's ResCap unit, the arm best known for ditech.com and other housing-boom related mortgage offers that crashed as housing prices withered over the last couple of years. GMAC said the move, along with a $3.3 billion write-down in mortgages at ResCap and Ally Bank, should allow it to explore a sale or other action for ResCap. The money comes on top of $12.5 billion that the U.S. Treasury had previously invested in GMAC to keep it afloat as the lender of choice for car buyers and dealers at General Motors and Chrysler. The U.S. Treasury said that under the new deal it would appoint four of GMAC's nine board members, up from two now.

- McClatchy-Tribune

AIG says general counsel resigns over pay cap

CHARLOTTE, N.C. - American International Group Inc. has lost a top executive due to the government's limits on executive pay. AIG said Wednesday that vice chairman and general counsel Anastasia Kelly has resigned, effective immediately. Kelly left because of the reduction in her base salary that was mandated by the government's pay czar, Kenneth Feinberg, AIG said. Companies like AIG that hold government bailout funds are subject to restrictions including limits on executive pay; in AIG's case, that's the insurer's 100 highest-paid employees. The government has given AIG a bailout package worth up to $182.5 billion in exchange for an 80 percent stake in the New York-based company. Last month, the insurer said it cut the salaries of three top executives to comply with the pay restrictions.

- Associated Press

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