New York Local and Regional News

Two people familiar with the matter say shopping mall operator Simon Property Group Inc. is considering raising its $10 billion buyout offer for rival General Growth Properties Inc. as early as this week.The two people familiar with a letter sent by Simon this week to General Growth say Simon anticipates boosting its offer above that of a deal put forth by a group of investors that includes two of General Growth’s biggest creditors.That means a new Simon offer would have to value General Growth above $15 a share.Chicago-based General Growth, the nation’s second-largest shopping mall operator, sought shelter from creditors last April. It was the largest real estate bankruptcy in U.S. history. General Growth owns the South Street Seaport in downtown Manhattan.

Latest e-book fight is over royalties
Matthew Flamm – While Amazon goes to the mattress for its coming e-book war with Apple, and publishers try to take back ground they lost long ago on e-book pricing, the Authors Guild has just reminded everyone that the battle over e-book royalty rates is far from over.A post that appeared Thursday on the organization’s Web site warned members about letters that are being sent to authors and agents by two major publishers in an effort to amend contracts regarding e-book rights. According to the post, the letters are going to authors who don’t have a stated e-book royalty rate in their contracts, or who have never granted e-book rights to their publisher.The letters, from HarperCollins Publishers and Random House Inc., seek to lock in e-book royalty rates of 25% of net receipts. “These amendments should be treated with extreme care,” the Guild told its members. And not for the first time.The subject of e-book royalties has long been a contentious one. Some publishers in the last year have changed their terms from 25% of the cover price of an e-book to 25% of net receipts, which puts less money in the hands of authors. Some independent e-book publishers are enticing authors with offers of 50% of receipts.The Authors Guild maintains that the matter is far from settled. Thursday’s post argued that the 25% rate that Random House and HarperCollins are offering “will prove to be a low-water mark for e-book royalties.”“The only reason e-book royalty rates are so low right now is that so little attention has been paid to them: sales were simply too low to scrap over,” the post continued. “That’s beginning to change.”The Guild went on to advise authors to be sure they retain the right to renegotiate rates; that they negotiate a “royalty floor” so that money from e-books doesn’t fall below what the authors get from print books; and that they check their contracts to see if they might still control their e-book rights.On Friday, the publishers mentioned in the post were keeping their reactions muted. “It is Random House Inc. standard business procedure to have an agreed-upon royalty rate with our authors and their representatives for the formats in which we publish them,” a spokesman said in a statement. A HarperCollins spokeswoman did not respond to a request for comment.

Court OKs TV rules opposed by Cablevision
A federal court has upheld regulations that require cable TV companies to make channels they own available to satellite TV providers and other rivals on equal terms.Friday’s ruling by the U.S. Court of Appeals for the District of Columbia leaves in place the Federal Communications Commission “program access” rules. The ruling marks a setback for Cablevision Systems Corp. and Comcast Corp., the cable companies that had challenged the rules in court.Comcast has nonetheless pledged to extend those rules to the local NBC and Telemundo stations it would control as part of its proposed combination with NBC Universal. Comcast is seeking FCC and Justice Department approval to buy a 51% stake in NBC Universal from General Electric Co.

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Many Blockbuster outposts could be up for grabs
News of a possible Chapter 11 bankruptcy filing by Blockbuster Inc. left many real estate experts salivating over the fate of the video-rental chain’s 22-store Big Apple empire. On Tuesday, the Dallas-based company announced in a Securities and Exchange Commission filing that it might be heading for bankruptcy protection due to slow sales and a heavy debt load.“The increasingly competitive industry conditions under which we operate has negatively impacted our results of operations and cash flows and may continue in the future,” Blockbuster said in the filing. It went on to warn that, “These factors raise substantial doubt about our ability to continue as a going concern.”Many experts think store closures are imminent. Blockbuster currently has nine locations in Manhattan alone, according to the chain’s Web site. A company spokeswoman did not immediately return calls requesting comment.“You might see a major closedown of quite a few of their stores in the metro area,” said Al Ferrara, partner of retail and consumer products at BDO Seidman. Already, Blockbuster has had to close about 1,300 stores across the country.“With the advent of [digital video recorders], cable on demand, streaming video, downloading content from the Internet and other rental channels like Netflix, it is not surprising that a business model based upon bricks-and-mortar stores is not sustainable,” said Richard Hodos, an executive vice president at CB Richard Ellis Inc. “They would have the ability in a Chapter 11 reorganization to affirm leases they wanted to keep and reject leases that they wanted to give up,” he added.Ariel Schuster, a senior vice president at Robert K. Futterman & Associates, noted that the potential downsizing of Blockbuster locations could be good news for retailers trying to expand around town.“Blockbuster is in the right markets all over the city, and the key is they took really nice, wide spaces so replacement tenants will have an easy time filling in,” he said. He noted that Blockbuster’s store size ranges from 3,000 square feet to 8,000 square feet. “The majority of their locations are in neighborhoods, so service-type retailers might fill the spaces, or some might be divided because of their size.”Blockbuster, which reported a fourth-quarter net loss of $434.9 million, currently owes about $975 million in senior secured notes and senior subordinated notes.Shares of the company plummeted more than 30% to near 27 cents in midday trading on Wednesday.

Ambac Financial delays releasing earnings report
Troubled bond insurer Ambac Financial Group Inc. on Tuesday delayed filing its fourth-quarter and full-year financial results.It was originally slated to release results on Tuesday for the periods that ended Dec. 31.In a filing with the Securities and Exchange Commission, the company said it cannot file them on time without unreasonable effort or expense until it concludes talks with Wisconsin’s insurance commissioner and with other businesses it is obligated to.The company said in the filing that it saw significant losses from its exposure to defaults on residential mortgage derivatives, and it lost $573 million, or $1.99 per share, for the first nine months of 2009.But company said is better than 2008, when it posted a loss of $5.6 billion, or $22.31 per share, for the year.The company said in November that it may run out of money and be forced to file for bankruptcy court protection. Its chief financial officer also left.Shares fell 1 cent to 76 cents in morning trading.

NY AG probing ‘pension padding’
New York’s attorney general is asking 28 government employers for payroll data as part of an inquiry into suspected cases of workers gaming the state retirement system to pad their pensions.State Attorney General Andrew Cuomo says he wants to ensure the system is “free from abuse.”The inquiry was prompted by instances in which some workers boosted their pensions by working a huge surge in overtime during their final year on the job.The list of entities getting the letters includes 10 counties, several small cities and towns, and state agencies including the Port Authority of New York & New Jersey, the Department of Correctional Services and the Thruway Authority.The inquiry follows a probe of lawyers who got school district pensions even though they weren’t full-time workers.

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