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but they have been at odds over how much mr. hunt would owe the government after his assets are sold |
the irs had demanded $ N million but mr. hunt would agree to no more than $ N million |
<unk> <unk> iii a government lawyer warned that mr. hunt stood to lose certain oil and gas properties $ N in english <unk> a colorado <unk> and other assets he might have kept if he had settled with the irs |
but they wanted to roll the <unk> and we 're going to let them mr. <unk> said |
stephen <unk> mr. hunt 's attorney said his client welcomed the gamble |
the tax court is n't expected to rule before early next year |
japan has found another safe <unk> for its money u.s. home mortgages |
an increasing number of big japanese investors are buying up u.s. home mortgages that have been <unk> and packaged for sale as <unk> instruments known as mortgage-backed securities |
as much as N N of new u.s. mortgage securities issued by the federal national mortgage association or fannie mae and federal home loan mortgage corp. or freddie mac now flow into japanese hands |
that may not come as a surprise to americans who have watched the japanese <unk> up properties in the u.s. from golf courses to a stake in rockefeller center |
but it marks a big change for the japanese who <unk> mortgage securities after getting burned by a big downturn in interest rates a few years back |
you ca n't say it 's a <unk> <unk> wave but we 're making some <unk> says fannie mae 's chairman david o. maxwell who visits tokyo at least once a year to explain and drum up investor interest in mortgage securities |
interest is a great deal higher than it was a year ago |
the steady growth of the mortgage securities market in the u.s. has even triggered talk of building up a similar market here |
evidence of the growing japanese demand for mortgage securities <unk> |
earlier this year blackstone group a new york investment bank had no trouble selling out a special $ N million <unk> trust it created for japanese investors |
industrial bank of japan which claims to be the biggest japanese buyer of u.s. mortgage securities says it will more than double its purchases this year to an amount one official puts at several billion dollars |
and a fannie mae <unk> this week promises to draw hundreds of prospective investors who can be expected to channel tens of billions of dollars into the market in the next few years |
last year there were only several big investors who were interested says <unk> <unk> a vice president at the international arm of nomura securities co |
this year some investors are changing their policies and investing a lot |
ultimately he says strong demand could help to drive down interest rates on mortgage securities |
at the moment nomura is the only japanese institution authorized to act as a primary seller of fannie mae instruments |
but other japanese institutions say privately that they are considering asking to join the <unk> selling group |
these securities are attractive to japanese investors for three reasons |
first they are safe |
while they are n't backed by the full faith and credit of the u.s. government as treasury bonds are it is widely assumed that the government would support them if necessary |
u.s. treasury bonds are still the dollar-denominated investment of choice for long-term japanese investors |
second they are liquid |
the secondary market in federally backed mortgage securities now exceeds $ N billion or nearly half of the $ N trillion in u.s. residential mortgages issued |
third they offer high yields |
at the moment some offer as much as N to N percentage points over treasury securities of similar maturities |
but there is a risk which the japanese discovered when they first dipped their <unk> into the market nearly five years ago |
since most mortgages can be prepaid or <unk> at any time issuers of mortgage securities retain the right to buy back their bonds before maturity |
that 's a <unk> for long-term investors since it forces them to reinvest their money usually at lower rates than the original mortgage securities carried |
two or three years ago the problem was that people did n't understand the prepayment risk says nomura 's mr. <unk> |
so they were surprised and very disappointed by prepayment |
<unk> the trouble to japanese investors mortgage securities pay interest monthly since most mortgages require homeowners to make monthly payments |
but japanese institutional investors are used to quarterly or semiannual payments on their investments so the monthly cash flow posed administrative problems |
as a result japanese investors <unk> clear of the mortgage securities |
but they did n't lose touch with the u.s. issuers |
since N japanese investors have bought nearly N N of $ N billion in fannie mae corporate debt issued to foreigners money that fannie mae uses to buy mortgages from u.s. banks |
and japanese investors took up nearly all of two $ N million real estate mortgage investment <unk> a kind of collateralized mortgage obligation that were offered to foreigners this year |
in addition further packaging of mortgage-backed securities such as blackstone 's fund have reduced the effects of prepayment risk and automatically reinvest monthly payments so institutions do n't have to |
freddie mac for years has offered a so-called participation certificate that guarantees it wo n't be prepaid for a set number of years and offers semiannual payments |
as georgia-pacific 's bid for great northern nekoosa has shown <unk> takeovers are still alive despite <unk> reports of their demise |
therefore the debate about poison pills will continue to rage in the <unk> of corporations and the halls of <unk> |
although poison pills come in different colors and <unk> they usually give current shareholders the right to buy more stock of their corporation at a large discount if certain events occur typically if a hostile bidder acquires more than a specified percentage of the corporation 's stock |
however these discount purchase rights may generally be redeemed at a nominal cost by the corporation 's directors if they approve of a bidder |
supporters of poison pills argue that their adoption forces bidders to negotiate with a corporation 's directors who are thereby put in a better position to pursue the long-term interests of the corporation |
recent studies by <unk> & co. conclude that corporations with poison pills have experienced greater <unk> appreciation than corporations without poison pills during the past few years |
critics of poison pills argue that they harm shareholders by letting corporate management defeat takeover bids at premium prices and by <unk> premium bids from ever being made to shareholders |
these critics are backed by several academic studies showing that the adoption of poison pills reduces shareholder values not merely in the short run but also over longer periods |
institutional investors that must evaluate poison pills on a regular basis are interested less in this general debate than in the answers to specific questions about the corporation issuing the pill |
does this corporation have a high-quality management team with a good track record |
does this team have a viable strategy for improving shareholder values and does this strategy require <unk> over an extended period |
will the adoption of this particular form of a poison pill significantly improve the chances for management to carry out this strategy |
if the answers to these questions are <unk> then institutional investors are likely to be <unk> <unk> toward a specific poison pill |
however the problem is that once most poison pills are adopted they survive forever |
although the current management team may be outstanding who will be the ceo in N years |
although the five-year strategy may be excellent what will be the strategy in N years |
the solution to this problem is a <unk> poison pill |
the limit could range from three years to seven years depending on the <unk> of the management team and the nature of its strategic plan |
at the end of this period the poison pill would be eliminated automatically unless a new poison pill were approved by the <unk> shareholders who would have an opportunity to evaluate the corporation 's strategy and management team at that time |
one rare example of a <unk> poison pill is the shareholder rights plan adopted by pennzoil last year after it received a huge litigation settlement from texaco |
pennzoil 's poison pill covers five years in order to give current management enough time to put these proceeds to work in a prudent manner |
another interesting example is the poison pill adopted recently by <unk> national intergroup inc. a diversified holding company |
the state of wisconsin investment board which owned about N N of the company 's voting stock worked with management to devise a <unk> poison pill |
this pill automatically expires after three years unless continued by a vote of the shareholders |
the attitude of the wisconsin investment board reflects a growing <unk> to <unk> poison pills on the part of institutional investors as shown by the discussions at recent meetings of the council of institutional investors and my informal survey of several retirement plans with large stock positions |
more widespread time limits on poison pills would allow shareholders to evaluate a specific poison pill within the context of a specific management team 's strategy |
such concrete analysis is likely to lead to more <unk> dialogue between management and shareholders than the <unk> debate about poison pills |
mr. <unk> is the general counsel and a managing director of fidelity investments in boston |
michael blair former president and chief executive officer of enfield corp. failed to win election to the company 's board at a special shareholder meeting |
mr. blair said after the meeting that he had filed separate lawsuits in the ontario supreme court for <unk> dismissal against enfield and for libel against its largest shareholder canadian express ltd. and two executives of hees international bancorp inc. which controls canadian express |
holders at the meeting elected a full slate of canadian express <unk> to enfield 's <unk> board |
mr. blair and hees have been <unk> for months |
yesterday 's election was a <unk> to enfield 's annual meeting in june when mr. blair <unk> <unk> in favor of two hees <unk> |
the ontario supreme court <unk> mr. blair 's decision |
he later resigned from his executive positions with enfield saying that actions by its board amounted to my dismissal |
mr. blair said his libel suit seeks N million canadian dollars us$ N million from canadian express and hees executives <unk> walt and <unk> <unk> |
he said his suit against enfield seeks two years severance pay equivalent to c$ N |
hees and canadian express executives could n't be reached for comment |
enfield is a holding company with interests in manufacturing concerns |
it is N N owned by canadian express another holding company |
hees is a merchant bank controlled by toronto financiers peter and edward bronfman |
all the concerns are based in toronto |
buying N N of rockefeller group inc. is right up mitsubishi estate co. 's alley in one sense the huge japanese real estate company is entering a long-term relationship with a similarly conservative u.s. owner of tony urban property |
but in another sense the $ N million purchase is <unk> <unk> industry analysts say |
the usually cautious giant will become the majority owner of the company that owns new york 's <unk> rockefeller center at a time when <unk> over japanese purchases of u.s. property are at an <unk> high |
officials of rockefeller group and mitsubishi estate prefer to focus on the <unk> nearly <unk> the threat of a backlash from the u.s. public |
we think there will be positive as well as negative reactions says raymond <unk> senior vice president and chief financial officer of rockefeller group |
on balance we think it will be positive |
but some japanese government officials and businessmen worry that the prominent purchase is just the sort of deal that should be avoided for the time being |
in particular they <unk> the timing coming as it does on the heels of sony corp. 's controversial purchase of columbia pictures entertainment inc |
officially yes we encourage the free flow of direct investment says a foreign ministry official |
but they did n't have to choose this particular moment |
during the past year government officials and leading business organizations have repeatedly urged japanese companies to <unk> from flashy real estate purchases in the |
since the mid-1980s japan 's other major real estate purchases in the u.s. include dai-ichi <unk> america corp. 's $ N million purchase of an office building at N east <unk> st. in manhattan in N and mitsui <unk> inc. 's $ N million purchase of the exxon building part of rockefeller center in N |
in los angeles arco plaza was sold to <unk> corp. for $ N million in N and <unk> life insurance co. paid $ N million for atlanta 's ibm tower last year |
altogether annual japanese investment in u.s. commercial real estate grew from about $ N billion in N to about $ N billion in N |
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