The Cincinnati Enquirer from Cincinnati, Ohio on September 12, 1991 · Page 15
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September 12, 1991

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The Cincinnati Enquirer from Cincinnati, Ohio · Page 15

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Thursday, September 12, 1991
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B-4 THURSDAY, SEPTEMBER 12, 1991 THE CINCINNATI ENQUIRER BUSINESS NEWS: 369-1962 NYSE stocksB-5 NASDAQ selectB-7 Amex stocksB-6 O Mutual fundsB-6 Portfolio federated, Allied to file mew plan BY JOHN J. BYCZKOWSKI The Cincinnati Enquirer 3100 3050 3000 Federated and Allied stores' H management and attorneys will ri H 2950 hang out the open for business shingle in New York today in an effort to iron out all remaining wrinkles in the companies' plan to emerge from bankruptcy. where numbers used to be. Aug said he felt it best to winnow down the 144 objections to see which big issues remain. "I'm in favor of doing as much as we can, as soon as we can," he said. Heiman said creditors wouldn't be asked to comment on changes they hadn't had time to study. Discussion of most big issues ranging from Federated's post-bankruptcy corporated (Please see FEDERATED, Page B-8) changes. The latest changes haven't been formally filed with the court. "We don't know what's before the court," said Harvey Miller, attorney for banks owed $1.8 billion. "We don't have adequate time to review last night's draft. . . . That's not due process." Ellen Werther, attorney for owners of Allied Stores junk bonds, said the first new version of the disclosure statement detailed dollar amounts for the proposed settlement with her group. The latest version had blanks nization plan. But the hearing ended in less than six hours. Of 144 objections filed, more than 80 of the meatier objections from key creditors were put off pending upcoming negotiations. Several dozen more were either withdrawn or resolved, leaving Judge J. Vincent Aug only a handful to decide. Many creditors objected to the fast pace of the disclosure hearing. Federated sent revised copies of the disclosure statement to creditors last week, and Tuesday night delivered 140 pages of new ing disputes and produce a reorganization plan "that we think can be confirmed," said attorney David Heiman, of Jones Day. The companies hope to file a new reorganization plan and disclosure statement this month and hearings to approve the disclosure statement will resume Oct. 3. U.S. Bankruptcy Court in Cincinnati set aside two days this week for hearings on the disclosure statement, a document detailing the financial and economic foundation of Federated's reorga Key creditors will meet with 2900 2850 30 2 3 4 5 6 9 10 11 Aua. SeDt. Federated representatives through next week in the New York offices of Jones Day Reavis & Pogue, Federated's bankruptcy attorneys, to try to end remain Dow Jones 30 Industrials Dally highs, with closes at arrow tip Area-Interest stocks In Industrial average (NYSE change from previous day) AT&T -18 GE 18 P&G 18 Cincinnati Stock Exchange volume ; Wednesday 1,355,400 wffi Economists present case for lighter side of antitrust debates Oil Word awaited on interest rates f m til n a Prices closed narrowly mixed on Wall Street Wednesday as apathetic traders waited for the Federal Reserve to push interest rates lower. The Dow Jones industrial average rose 4.47 to 2,987.03 after dropping more than 24 points the previous session in a computer-program mum 6 i m mmmmmmmmmmmm assisted selloff. The blue chip indicator spent most of Wednesday in minus territo ry before moving marginally higher in the afternoon. In the broader market, declin 1 1 1,1 E ' id, ing issues outnumbered advancers by a margin of about 10 to 9 on the New York V c ' , r '' , " 1 I - u V ft' Stock Exchange. Volume on the floor of LfKt i 1 it the Big Board came to 147.91 million shares as of 4 p.m., up from 143.34 F" III 3 million in the previous session. Drexel blames Milken i v I v Vj ' 1 (" ill jG V o BY MARK BRAYKOVICH The Cincinnati Enquirer Somehow, the theater of the absurd seems the perfect place for economics. You know economics, that serious subject studied by serious people discussing serious topics such as free markets and supply-demand curves. And the theater of the absurd, used by many a playwright to demonstrate the absurdity of positions people take by presenting them in a serious light. Marry them, and the result is a new playbook written by two distinguished economists both intent on illuminating the ongoing debate over antitrust while making for fun economics reading, a rarity indeed. Play's the thing "We figured economics was a natural for this kind of setting," said James Brock, a Bill R. Moeckel professor of economics at Miami University. Along with co-author Walter Adams, an economics professor at Michigan State University, who has served as an adviser to three U.S. presidents, he has crafted a play that presents a controversial, complex issue in a courtroom setting that is brought to life with animated dialogue. At issue in Antitrust Economics on Trial: Do antitrust laws promote com petition and enhance economic efficiency, or interfere with markets and destroy economic efficiency? These are questions that have tugged at the hearts of many economists, antitrust lawyers, Congressmen and judges for years, and were heightened during the anti-antitrust Reagan administration. The debate also engulfed Brock and Adams, who had teamed up on books and articles over the years. Antitrust intrigue Among the notable works by Brock and his former college teacher, Adams, were The Bigness Complex in 1987, which was named one of the top 10 business books that year by Business Week magazine, and Dangerous Pursuits: Mergers and Acquisitions in the Age of Wall Street, published two years later. The two men, who keep in frequent communication, had always been intrigued by antitrust (it was the subject of Brock's college dissertation in the late 1970s under Adams' supervision). They also shared a fascination for the so-called theater of the absurd and playwrights who employed it. When one such playwright, Vaclav Havel, became president of Czechoslo- (Please see PLAY, Page B-8) I .A, Drexel Burnham Lambert inc., in a maneuver resembling a final betrayal, on Wednesday blamed its demise on Michael Milken and sought billions of dollars in back pay, legal fees and damages from the 1 J TJL3 ' r junk-bond pioneer. In a lawsuit filed in Manhattan federal court, Drexel claimed Milken concealed his illegal activities, exploited the firm to make private investments and tricked Drexel into believing for years that he was innocent. The 44-page lawsuit marks another stunning turn in the celebrated Wall Street fraud case, transforming the split of the one time allies into a battle over Milken's personal fortune and the history of Drexel t TL :C. r. the 1980s. Milken has long been cred Walter Adams, left, and James Brock are co-authors of Antitrust Economics on Trial. ited with almost single-handedly pioneer ing a market in high-yield bonds that financed corporate expansion and hostile takeovers and transformed Drexel from a second-tier firm to Wall Street titan. NutraSweet adds fitness Lower interest rates not all good news Diet food leader NutraSweet Co. hopes to get a jump on another trend with its plan to develop a chain of fitness centers Buyers benefit; for people over 50 a group that soon will be bulging with fat-conscious baby boomers. About 76 million boomers will savers suffer move into their 50s in the next five years and by the year 2030, one in three BY VIVIAN MARINO Americans will be 50 or older, Census Bureau figures show. They are the target The Associated Press group for NutraSweet s WellBndge Cen NEW YORK Interest rates ters. The first is scheduled to open in mid-1992 in Newton, Mass., near Boston. are falling, but for many Americans the drop is a double-edged substantially lowering their monthly payments by refinancing at a lower rate. . Also benefiting were many first-time buyers, who might have been unable to qualify for a mortgage when rates were higher. Some say their mortgage payments are even lower than the rents they had been paying. In addition, many homeowners with existing adjustable-rate mortgages are reporting, or else expecting, lower monthly payments as rates are adjusted down to reflect prevailing rates. But while these key borrowing rates have declined rapidly, so have rates for savers. Robert K. Heady, publisher for North Palm Beach, Fla.-based Bank Rate Monitor, which tracks bank interest rates, says rates on certificates of deposit are the lowest they've ever been and poised to go lower. The yield on the six-month CD now averages 5.54, down from 7.70 a year ago. On a one-year CD the average yield is 5.81, down from 7.84. "Rates are dropping every week. You're down at the measly passbook (savings account) level," said Heady. Adding to the pain are some consumer loans. Credit card rates, for instance, are actually higher. They now average 18.94 compared with 18.69 a year ago, Bank Rate Monitor figures show. percentage point to a five-year low of 5'2. In recent weeks, it has injected more money into the banking system, thereby helping lower other rates. Banks have responded by trimming their key prime lending rates V2 percentage points this year to 8.5, a 3'2-year low. Mortgage rates have followed suit, fluctuating now in the 9 range on 30-year fixed loans, the lowest level since the 1987 winter, and at around 6 for the first year of adjustable-rate loans, the lowest ever. Lenders nationwide said mortgage volume rose during the spring-summer home-selling season thanks to the drop in interest rates, with many homeowners isn't over since the country has yet to make a convincing comeback from the recession, which began in the summer of 1990. To that end, the Federal Reserve has been nudging rates lower. By keeping rates down, the central bank figures it can jump-start the economy because businesses and consumers will borrow more. "It looks like the recession is over, but the recovery is sluggish. The Fed wants to see more buoyancy in the economy," said William V. Sullivan, director of money market research for Dean Witter Reynolds Inc. Since February, the Fed has cut the discount rate, the loan fee charged to member banks, a full sword. The center will provide individualized exercise and nutritional counseling for 2,000 To those living on fixed in to 2,500 paying members, company offi- , cials said. Prices have not been deter comes, like the elderly, it's meant getting by with less, as returns on bank deposits or Treasury bonds move down. Others are mined. Officials declined to discuss specif ic expansion plans. Centralized services asked reaping big savings in household expenses with mortgage rates at 4'2-year lows. Cincinnati City Councilman Dwight Til- Economists say the ride down lery wants the city to centralize services to develop small businesses. In a motion Wednesday to City Council, Tillery said efforts to help small businesses are too fragmented. Services, such as loans, On display technical and administrative assistance, need to be offered in an organized and Searle invests in Meridian Drug maker to share research with local firm coordinated fashion," Tillery said. "We are not maximizing the services to small businesses offered by different city de partments when they are scattered around." Tillery is calling for a task force of city employees and the Greater Cincin nati Chamber of Commerce to develop a new program that would coordinate the different services. His motion was referred to the City Manager's office and to It was created by Irwin Gruverman, as general partner, and Searle Venture Capital Co., an affiliate of G.D. Searle, as limited partner. Gruverman is founder and chairman of Biotechnology Development Corp., a supplier of innovative formulation equipment and methodology to the health care, food, cosmetics, home products and process industries. Motto sold G&G Diagnostic 10,000 shares of common stock in Meridian, BY MARGARET JOSTEN The Cincinnati Enquirer The top officers of Meridian Diagnostics Inc. have sold a little over 1 of the Newtown test kit manufacturer to a venture capital fund allied with the prescription drug maker G.D. Searle & Co. G&G Diagnostic Limited Partnership I, an affiliate of Chicago-based Searle, purchased 50,000 shares of Meridian common stock for investment purposes, according to Meridian officers William J. council s development committee. Future Now expands . if In a move expected to have a significant impact on revenues, Future Now Inc., the Sharonville microcomputer dis b-fc. ' fill Jerry L. Ruyan tributor, said Wednesday it has been au thorized to sell IBM's full line of micro Motto, chairman, and Jerry L. Ruyan, president. computer products in the Columbus, Ohio, market. Previously, it had been limited to selling IBM products only to the educa tional market in Columbus. Terry Theye, Future Now president, said the expanded IBM authorization should have an immedi leaving him with 2,027,837 shares. Ruyan sold 40,000 shares, leaving him with 1,168,406 shares. At a market price of $6.25 per share, the stock purchase was worth a little more than $300,000. Ruyan said it was unlikely that Searle would be interested in buying more Meridian stock. "We feel it's kind of a compliment to the company that G.D. Searle would have an interest in buying (stock)," he said. Meridian develops, manufactures and markets a variety of immunodiagnostic test kits and other items for use in physicians' offices and in hospital, commercial and research laboratories. Ruyan said Searle has no interest in the management side of Meridian, but expects to enhance its investment by turning over to the Cincinnati firm results of research it finances at various universities. "A couple of opportunities they forwarded this morning," said Ruyan, explaining that Searle pays universities to carry out the research, but has no corporate interest in it. "We feel it is a positive move (for Meridian) in that aspect." G&G Diagnvistic was set up to invest in medical diagnostic opportunities in North America and ate impact on the Columbus office's sales and earnings. IBM products account for about 30 of Future Now's total sales, which last year topped $83 million. The company said the authorization will also probably mean an expansion of its 22-per- The Cincinnati EnquirerPhaedra Singelis Fern Thornton, left, and Ann Drew inspect vegetables at Squeri Food Service's annual food trade show at Riverfront Coliseum Wednesday. About 185 food producers and related companies displayed their products at the show. son Lolumbus sales sian. Compiled by Dick Benson from staff and news service reports nr

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