A group of General Motors Corp. bondholders and some of the automaker’s labor unions filed objections Friday to the company’s plan to sell its assets to a new company that can emerge from bankruptcy protection. Their opposition, along with additional objections filed by consumer groups, a handful of states and cities, and individual retirees, shareholders and bondholders, threatens to put the brakes on what has so far been a speedy trip through the Chapter 11 process. Members of the Unofficial Committee of Family &Dissident GM Bondholders claim they are being treated unfairly compared with the automaker’s other stakeholders and deserve more than the 10 percent stake in the new company that they would receive if the sale goes through. In its motion, the bondholders group accused GM and the U.S. government of unjustly pushing the case through the bankruptcy process at the expense of the bondholders and dividing the new company’s assets “among a few select favored classes.”
West jobless rate over 10 percent
The housing bust sent the unemployment rate in the West bolting past 10 percent in May — the first time in more than 25 years that a region of the United States has suffered double-digit joblessness. A Labor Department report released Friday showed the West absorbing the worst of the recession, which is now the longest since World War II. California, Nevada and Oregon endured particularly heavy job losses in construction, manufacturing and tourism. The region has been pounded because it was the epicenter of the housing boom that collapsed. As home values plummeted, the West lost jobs and wealth.
Yahoo cutbacks to cost $30 million
Yahoo Inc. says laying off nearly 700 workers will cost between $30 million and $34 million in severance pay and other related expenses. The layoffs, which affect about 5 percent of Yahoo’s workers worldwide, were announced in April. They were the first significant cuts since new CEO Carol Bartz joined Yahoo in January, but they mark the Sunnyvale-based company’s third round of reductions in the past 16 months. Yahoo says it will also gain between $7 million and $8 million related to forfeited stock and options.
Reader’s Digest cuts annual issues
Reader’s Digest Association Inc. is reducing the frequency of its flagship magazine and slashing the circulation it guarantees to advertisers. The company said Friday it will publish its U.S. magazine 10 times a year rather than 12 beginning with next February’s issue. It will also adjust its rate base from 8 million to 5.5 million over an 18-month period. A rate base is the circulation the company is guaranteeing to advertisers. Advertisers pay for their ads with the understanding that they get that amount of circulation.
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