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Interest rates on most student loans will be going up July 1, but only a fraction of a percentage point. If you’ve got a variable rate loan, the new rates for Stafford loans are 6.62 percent (in school or deferment) and 7.22 percent (out of school), while the rate for parental PLUS loans is 8.02 percent. The fixed rate at which new loans are issued will not change. It’s 6.8 percent for Stafford
(Photo credit: Helen Huntley)
TAMPA — A Clearwater developer is negotiating to bring what it says will be the only five-star hotel in Tampa to property near the Courtney Campbell Parkway.
If negotiations between Ritz-Carlton and developer Sandip Patel are successful, the new hotel would be built where the Radisson Bay Harbor Hotel at Rocky Point now stands. The Radisson would be demolished.
In January, Patel’s company said the new $300-million development would have two towers, one with 325 luxury rooms and condos while the second would have just condos. Residents and hotel guests would share two hotel restaurants, a spa, bar, pool and banquest hall.
City officials said Patel’s development companies should know by July is negotiations are successful. Mark Huey, the city’s economic development administrator, said negotiations appear far along and he is confident a deal can be struck.
A five-star hotel, Huey said, would help Tampa market itself.
“It really is an element that will make us more competitive for certain kinds of convention and tourism business,” Huey said on Saturday.
-- By William R. Levesque, Times Staff Writer
Need an *NYSNC gold record, Orlando Predators helmet or a Louis J. Pearlman desk name plate? How about CDs, office furniture, computers or parts for your Gulfstream jet? Those are some of the items expected to be included in the Pearlman/Trans Continental Airlines auction now scheduled for 11 a.m. June 12. It will start at TCA headquarters at Church Street Station, where most items will be auctioned. There also will be a trip to Pearlman's Windermere home to auction a boat and two jet skis docked behind his house and to an Orlando warehouse where band CDs, aircraft parts and other items are stored. If you don't want to go in person, many items will be sold on BidSpotter.com. I'm told you'll be able to hear the auctioneer (assuming the sound on your computer works), see photos of many items and submit your bids. Auctioneer Harry Stampler says a list of the auction items should be available on BidSpotter by Tuesday or Wednesday. Before you buy, think about how you're going to get the item out of there. Stampler will assist to some extent (i.e. packaging something in a FedEx box for you), but for larger items, you'll have to make arrangements with a moving company. That's Lou's desk to the left in case you don't recognize it.
fyi-Orlando Sentinel article about Church Street's trains. (These are not part of the auction.)
(Photo credit: St. Petersburg Times)
Jerilyn Stein has posted some advice for filling out the bankruptcy forms that you may find helpful if you do not have your own lawyer to help you. She is not a lawyer (and neither am I), but she has worked very hard to research the issues and I applaud her efforts.
Keep in mind that you need not rush to file the bankruptcy claim form, but it must be received by the clerk's office by July 30.
Jabil Circuit caught up with its long-delayed financial reporting Thursday, although the news wasn’t overly cheery. Profits fell steeply for the first half of the fiscal year and the St. Petersburg-based company said it might report a loss for the current quarter.
The global electronic manufacturer said it had net income of $55.3-million, a decline of 62 percent, on revenues of $6.2-billion, a gain of 30 percent, for the six months ended Feb. 28. The results included a $16-million in restructuring charges.
Reporting was delayed as the company reviewed how it accounted for stock options granted executives and other employees. Last week it reported numbers for the last fiscal year and revised several earlier statements.
Thursday the company gave investors a range of what to expect for the quarter that ends this month. Jabil said revenue will be between $2.9-billion and $3-billion and earnings per share will range from a loss of 8 cents to a gain of 4 cents.
The company’s conference call with analysts will be available live at 1 p.m. at jabil.com.
Lou Pearlman or someone purporting to be him filed this document by fax in bankruptcy court in the middle of the night with no return address or phone number. It was done in objection to this motion by trustee Soneet Kapila asking the court to order one of Pearlman's former lawyers, Rene Chamberlain, to turn over files related to Pearlman and Trans Continental.
As my story in today's Times notes, Pearlman is worried the documents might be used in his criminal prosecution and claims turning them over would interfere with his right to not incriminate himself. He also says he can't find a lawyer to represent him because of conflicts of interest and asks the judge to appoint a public defender.
This missive raises some interesting issues. First, we all know that there are lawyers who would represent Lou if they were sure they were going to get paid. There is no right to a public defender in bankruptcy cases, but there is in criminal cases if you have no money. So far, Lou isn't claiming that. However, could it be far behind that Lou is asking for a criminal lawyer to be paid out of the bankruptcy estate? That would mean his lawyer would get paid in full before investors and other creditors got a dime. I would think the creditors' committee might have some objection to that.
A more serious question: should Lou be able to invoke constitutional rights without actually showing up? Debtors have been held in contempt of court and even jailed for failing to turn over assets.
UPDATE: Creditors have now challenged Lou's filing with their motion to strike. Among other things, they want to be sure that he will show up for questioning June 6 as ordered by the court.
You think this could get any crazier?
The Backstreet Boys are still battling Lou Pearlman and Trans Continental Records in court. This lawsuit, originally filed in Florida, was moved to the Supreme Court of New York County, where it's now pending but can't go forward because Pearlman and TCR are in bankruptcy. The Boys paid Pearlman $29.5-million in 2000 to break free of his tentacles, but they say he misled them that others who played roles in the Boys' success had been "taken care of." Now some of those people are suing the Boys along with Pearlman. A Nashville lawyer has filed notice in the bankruptcy court that he is representing the Boys' interests in the case, although no claim has been filed yet. Lawyer Jason Turner said he estimates the Boys' claim to be worth $4-million. Pearlman and TCR also are suing the Boys, claiming they breached the settlement agreement. The Boys (minus Kevin Richardson) are finishing up a new album that will be released later this year on Jive Records. Last year they sold 86,000 records in the U.S., according to Nielsen SoundScan.
(Photo credit: album cover)
Two Orlando office/warehouse condos owned by Lou Pearlman have gone on the market. Bankruptcy trustee Soneet Kapila is asking $970,000 for one and $600,000 for the other property, both in Building B at the Drewtina Commercial Center, 7075 Kingspointe Parkway, Orlando. Each property has 1,000 square feet of finished office space plus warehouse space. The warehouse portion is 5,658 feet for the larger condo and 3,156 feet for the smaller one. Contact information.
Four individual investors have been named to the creditors' committee in the Trans Continental Airlines Bankruptcy: Michael Connelly, Venice; David Mathis, Huntley, IL.; Leonard Gravitz, Tarpon Springs and Roberta Jordan, Valrico. The committee also includes four banks: Integra Bank, Evansville, Ind.; American Bank of St. Paul, MN; First National Bank of Willston, ND; and Tantoka Capital Corp., plus Thorndale Investment Co. of NY. Click on the link for contact information: TCA Creditors' Committee. This committee is supposed to represent the interests of unsecured creditors in the bankruptcy proceedings.
Also Soneet Kapila asked the court to approve the hiring of Harry Stampler and Stampler Auctions to auction Lou Pearlman and TCA property left at Church Street Station. Stampler will get 10% of the gross proceeds plus expenses (estimated at $21,250). The preferred date is June 5, from 9 to 11 a.m. on site. However, it might be May 29th if necessary because of the sale of Church Street Station. Live online bidding will be available. I'll publish more details later.
Latest claims count: $78.9-million for TCA and $40.2-million for Pearlman (Includes some duplications because claims filed in both cases.) Remember that if you are a TCA investor filing a claim in the Pearlman case, you need to state a reason that Pearlman should be held personally responsible for TCA's debts. One claim I read contained language similar to this: "Pearlman operated Trans Continental Airlines and other companies as alter egos, ignoring corporate formalities, and as a Ponzi scheme with the intent to defraud creditors. As such, Pearlman is liable for the full amount owed creditors of Trans Continental Airlines." You might also add other information. For example, if Pearlman was personally involved in soliciting your investment and misleading you regarding your investment, you could mention it.
Pearlman/Trans Continental trustee Soneet Kapila has updated his frequently asked questions to respond to some questions raised here that I posed to him. Unfortunately, the response is that these are complicated legal issues. Here's what he says:
How broadly are you planning to stake your claim to any recoveries that investors make from third parties?
If, for example, an investor wins a judgment against an independent sales agent who sold the EISA plan, or wins a judgment against others involved in the scam, would you (as Trustee) sue the investor to claim the award for the bankruptcy estate?
SK: These questions raise complex legal issues that would require some in-depth analysis on the rights and claims of the individual investors as opposed to the rights and claims that I have as the Chapter 11 Trustee for Pearlman, TCA and other related companies for which I may be named Chapter 11 Trustee in the future. These are complex legal questions that require the advice of a lawyer and depend on the facts that exist for each case. Each investor may have a different fact scenario. I am not in a position to provide legal advice.
On the theory of “constructive trust”, do you have an opinion on whether EISA investors could be considered to have placed their money with Trans Continental as a trustee rather than as a borrower? If you as a trustee were to accept this theory and the judge would agree, would you apply the same treatment to all the EISA investors or only to those that submitted a constructive trust argument with their claim forms?
SK: This question raises a complex legal theory that cannot be easily or generally stated. The ability of any investor to pursue a constructive trust claim against an estate will depend heavily on the facts of each individual case.
Other coverage:
Orlando Sentinel story on Church Street Station.
Hard as it may be to believe, money that belongs to you or your neighbors could be languishing in the custody of Florida's Bureau of Unclaimed Property. They don't look very hard to find you. In fact, just a simple search turned up the fact that our esteemed Gov. Charlie (Charles J.) Crist is owed a premium refund on his car insurance. Although I've never found my own name on the list, I've often found friends and relatives listed.
The state says it currently holds more than $1-billion in unclaimed property, mostly from dormant accounts in financial institutions, insurance and utility companies, securities and trust holdings. That includes $44.7-million from Hillsborough County and $39.2-million in Pinellas County. Here's the Web site to check on whether you're on Florida's list. (or call 1-88-VALUABLE). I recommend bookmarking the site and checking periodically.
Check here for links to sites in other states.
Q. My grandsons, ages 5 and 2, are going to a church school for kindergarten & pre-kindergarten. I believe I recall reading that there is an income tax deduction for payment to the school. Am I correct?
A. Not exactly. Preschool expenses qualify for the dependent care credit if both parents work. However, tuition for a child in first grade or higher does not qualify.
The only break for tuition paid below college level relates to the Coverdell Education Savings Account. Withdrawals from that account are not taxed if used to pay tuition. There is no tax deduction for contributions to the account.
(Photo credit: Getty Images)
Today's paper offers my annual look at the Tampa Bay area's largest public companies. Among the developments: Lots of companies are ducking out of the public spotlight, opting for private buyouts or offers to become part of larger public companies. We've seen seven such deals in the past year, two of which affect the Times 10 list. If you're looking to invest in your own back yard, you might want to do it soon! Here are some additional comments on the companies from business editor Bob Trigaux.
Times 10 Annual revenue in billions
1. Tech Data $21.4
2. Jabil Circuit *
3. OSI Restaurant Partners + $3.9
4. WellCare Health Plans $3.8
5. TECO Energy $3.4
6. Raymond James $2.3
7. Lincare Holdings $1.4
8. Walter Industries $1.3
9. MarineMax $1.2
10. Global Imaging ++ $1.1
* Current information not available;
$7.5-billion in revenue reported for 2005
+ Buyout pending
++Acquired by Xerox Corp.
(Photo credit: St. Petersburg Times)
State-appointed receiver Jerry McHale's role is winding down as more of the Lou Pearlman/Trans Continental case transfers over to the bankruptcy court. As he notes in a report filed this week, the sale of Church Street Station, where Trans Continental has its offices, will mean Trans Continental's phone and internet service will be cut off.
Jerry took on a challenging and important job when he stepped into the Trans Continental case in February after Pearlman fled the country. With loads of records shredded by Pearlman's employees or seized by the FBI, trying to bring some order to the chaos has been difficult to say the least. This photo shows Jerry sitting amidst the bins of mail. Once someone else was appointed bankruptcy trustee, Jerry cooperated with the trustee as well as the FBI investigators to gather assets and information. While you may not agree with everything he has done, he laid the groundwork for whatever recovery of assets there eventually will be.
(Photo credit: St. Petersburg Times)
So would you put up big bucks for the lovely key to the city (shown at left) that Orlando gave Lou Pearlman? How about a picture of Lou with Britney Spears? an Orlando Predators helmet? or maybe one of the Backstreet Boys' gold records? Bankruptcy trustee Soneet Kapila is making plans to auction off Lou's personal property. The proceeds will be part of the bankruptcy estate. I don't have a date yet for the auction, but will post it as soon as I do.
Bankruptcy filing update: As of today, 171 claims for $26.1-million have been filed in the TCA bankruptcy and 109 claims for $18.5-million in the Pearlman bankruptcy. Many creditors filed their claims in both cases (which is recommended.)
(Photo credit: St. Petersburg Times)
In today's Times, I wrote about Michael Wise, one of the leading figures in the savings and loan scandal of the 1980s, now working in St. Petersburg. Wise headed Silverado Savings, which cost the government $1-billion when it failed, then went on to start another company where he was accused of stealing $8.7-million and ultimately spent three years in federal prison for wire fraud. He's now at CFIC Home Mortgage headquarters in downtown St. Petersburg. Wise wouldn't talk to me, but he sent this email to headquarters employees today:
"Today's St.Petersburg Times business section contains an article about me. It focuses on my past, including time I spent in prison. I have made serious mistakes, the consequences of which will be with me for the rest of my life, and that is how it should be. While I don't dwell on my past, it serves as a powerful motivator to make my future better. Five years ago, Chris Likens offered me an opportunity to do that, and for most of that time I have worked here at CFIC. It has been, and continues to be, a labor of love for me. The business founded by Harold Barian, is a great business, and the people associated with it are among the best I have ever encountered. I am blessed to have the opportunity to work among you, and I am truly thankful for the privilege to do so."
Learn more about how to avoid becoming the victim of a scam at these upcoming seminars:
Tuesday, May 15: Jeri Dresner, senior special counsel for the U.S. Securities and Exchange Commission Miami office, will lead a seminar on "Safe Investing for People over 50" at the Sunshine Center, 330 Fifth St. N, St. Petersburg. 7 pm registration and refreshments, 8:30 pm program. This is a meeting of the American Association of Individual Investors' local chapter (a good group to meet if you're interested in learning more about investing). Cost for nonmembers is $14 at the door. More info.
Monday, May 21: Governor Charlie Crist, Stetson University College of Law and the Florida Dept. of Law Enforcement will sponsor “Investigating and Prosecuting Financial Exploitation of an Elderly Victim” in the Eleazer Courtroom on Stetson University Gulfport campus, 1401 61st St. S. 10 a.m. to 4:30 p.m. More info: Special Agent Nita Ashley at 850-410-7568 or e-mail nitaashley@fdle.state.fl.us.
Thursday, May 31, "If it is too good to be true...scams old, new and internet" by professor Richard Graves at Stetson University College of Law, in the Eleazor Courtroom at 1401 61st St. S, Gulfport. 10:30 a.m.-11:15 a.m. Free. More info.
The claims have begun trickling into bankruptcy court in the wake of the collapse of what could turn out to be the largest Ponzi scheme in state history. So far 79 have been filed in the personal bankruptcy case of music promoter Lou Pearlman and 128 for Trans Continental Airlines, his primary company. Among them, investors David and Beverly Mathis say they’re owed $2.8-million. There's also nearly $400,000 worth of bank credit card claims against Pearlman.
The list of potential creditors filed with the court has more than 1,400 names, including that of Pearlman’s famous cousin, singer Art Garfunkel. Creditors have until July 30 to file their claims. The creditors' list is available to the public, so don't be surprised if you get mailings.
For those who felt cramped at last week's creditors' hearing, consider this: the Tampa office of the bankruptcy court rented a hotel ballroom for the creditors' meeting for Construction Compliance Inc.
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Question: Are municipal bonds, muni bond funds and tax-free money market funds really tax free? Are they a safe investment?
Answer: The interests and dividends from municipal securities and the mutual funds that own them generally are tax free. However, income from certain types of these securities (known as private activity bonds) are taxable if you are subject to the alternative minimum tax. Capital gains are taxable if you or the mutual fund sell municipal securities at a profit.
Bonds and bond funds fluctuate in value, so it is possible to lose money if you sell. There also is the risk of default; the issuer might not be financially able to make interest or principal payments. Individual investors should avoid low-rated and unrated bonds and never have more than 10 percent of their money in the securities of any one issuer. Money market funds try to maintain a stable $1 per share value. Although that’s not 100 percent guaranteed, they are considered safe.
You can find more information here.
Today's column is one of the more interesting I've done in awhile, exploring the money-sex connection. A big part of that connection is that anxiety about anything affects our functioning. Spending more than you make and/or worrying about how you are going to pay your bills takes a toll. And of course, in a society like ours, many people's sense of self worth is tied into money, whether it's how much they make or what they spend it on. Some people's overspending is the result of trying to look good to others by buying things you cannot afford. Ultimately it's about keeping things in balance.
Here's a new tool for organizing your family's financial, medical and other important records - and it's free. T. Rowe Price is offering the PC-compatible CD covering investments, credit cards, income, insurance, loans, property, medical information and estate and funeral planning. You can get it here or by calling (800) 538-2706.
(Photo credit: T. Rowe Price)
At this week's creditors' meeting, assistant U.S. Trustee Kenneth Meeker compared the Trans Continental case to an earlier investment scam, also based in Orlando. Until Trans Continental fell apart, Evergreen had the title as the largest Ponzi scheme in Florida history. The company owed $214-million to investors when the scheme collapsed six years ago. Since then eight people have been convicted or pled guilty to crimes. So far $27.3-million has been recovered, of which $17.5-million has been distributed to investors. This recent report gives the details. (It is from a section of the Evergreen Creditors Committee Web site.)
A recent Orlando Sentinel story.
This is one of those cases in which it might be tough to decide whether to laugh or to cry. Lou Pearlman has been accused of running the largest Ponzi scam in Florida history and perhaps the longest-running ever, and the Orange County Sheriff's Office responds by revoking Pearlman's honorary deputy badge. To be fair, the FBI is the agency heading up this investigation, but still.....
Pearlman got the honor in 2001 in recognition of his efforts to redevelop Church Street Station, according to sheriff's office spokesman Jim Solomons. He said Pearlman had to pass a background check to qualify. He said the office has given out about 650 badges over the years, including some to Orlando Magic players. "It has no enforcement powers," he said. "It won't get you in free at Disney World." Solomons said Sheriff Kevin Beary decided to revoke the credential based on the allegations made against Pearlman. He said the sheriff is demanding that the badge be given back, but "we don't know where to send the letter."
No word yet on whether Orlando is going to take back its key to the city.
Investors weren't the only ones at the Lou Pearlman creditors' meeting Monday. Among the others in the crowd: lawyers looking for information to help their cases.
St. Petersburg lawyer Jack Kiefner has been working to get priority treatment for EISA claims. His latest approach is to claim that the investments were not a creditor/debtor relationship but rather that Trans Continental Airlines was holding the accounts as a fiduciary in a constructive trust. He says his clients are going to be checking "other" on their bankruptcy claims rather than filing as unsecured creditors. They will then include a legal argument that this is a trust situation. The judge will determine whether this approach will fly. Clearwater lawyer Jeff Coleman is interested in helping investors claim fraud losses on their income tax returns through his business Investment Fraud Recovery Network (see the April 6 post on income taxes and Trans Continental). He was hoping the trustee would have a determination by year end on how much investors would recover so the loss can be claimed on 2007 returns. Soneet Kapila said that's overly optimistic. Tampa lawyer Jim Lowy was also there. "That the trustee would chase political contributions under fraudulent transfer provisions of the U.S. bankruptcy law is hugely helpful," he said. Kapila said he will review contributions, but did not say he considered them fraudulent transfers. We'll see how it all plays out.
 St. Petersburg Times personal finance editor Helen Huntley writes about money topics and answers questions about financial planning, investments and personal income taxes.
Helen has been following the Lou Pearlman/Trans Continental investment scam since December 2006. Read more about it in this special report and on this blog. Looking for help with your income taxes? Check out this special report
E-mail questions to Helen Huntley: |
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