Finance Blog number 1

Small business owners are not aware of the financial risks involved in obtaining workers’ compensation insurance through self-insured groups, according to a new study by Opinion Research Corp.

Eighty-five percent of the 501 small business owners and managers surveyed nationwide by the Princeton, N.J.-based research group said they hadn’t seen, read or heard about the closure of several self-insured trusts last year. Seven such companies failed this year in New York, and litigation continues in the financial failures of groups in Tennessee, Kentucky and California.

About 58 percent of the respondents reported they are unaware companies belonging to self-insured groups remain financially responsible — often for years — for the claims of all companies in their group, not just their own businesses (payday loans).

Only 34 percent of respondents realized they could be legally and financially responsible for the entire costs of workers’ compensation claims owed by their self-insured group.

Yet 27 percent of small businesses surveyed agreed saving money up front on workers’ compensation insurance premiums outweighs the financial risks posed by membership in a self-insured group.

The possible financial dangers associated with self-insurance include failure of the largest company in the group, successive years with serious injuries and the responsibility for paying out claims for up to five years, even if a small business leaves a group, the study said.

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A N.Y. judge has put a temporary hold on Wells Fargo & Co.’s proposed $15.1 billion buyout of Wachovia Corp., Citigroup announced Saturday night.

Judge Charles Ramos of the N. Y. Supreme Court has ordered Wachovia (NYSE:WB) to court on Friday. He will hold a hearing on whether the Wells deal violates Wachovia's earlier agreement to sell its banking operations to Citigroup for $2.16 billion.

Until then, his order issued stops Wachovia and Wells from consummating the deal.

The Wachovia/Citigroup deal was brokered Sept. 29 with the help of federal regulators. Citigroup (NYSE:C) says it includes an exclusivity agreement that prevents Wachovia from negotiating an acquisition by anyone else.

On Oct. 2, Wachovia announced it negotiated a deal with San Francisco-based Wells (NYSE:WFC). That calls for the sale of the entire bank holding company to Wells for $15.1 billion. The Wachovia board approved that deal last Friday.

Wells has insisted there is no bar to its deal with Citigroup, based in New York (cash loan). Now Ramos has called Wachovia into court to defend that position.

The court records were not available Sunday morning. But Citigroup says Wachovia objected to the proceedings and attempted to head off the order.

Citigroup says it is prepared to resume its negotiations to buy most of Wachovia’s assets. Some parts of the bank, such as Wachovia Securities, are not part of that deal, which involves financial guarantees from the Federal Deposit Insurance Corp. The proposed Wells deal would include no such guarantees.

Citigroup says it has been providing funds to Wachovia to preserve its liquidity since the Sept. 29 agreement. It says it was completing the requirements of the deal when Wachovia made its surprise announcement late last week.

Wachovia officials could not be reached for comment.

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A new government report says personal spending stagnated in August as Americans continued to be weighed down by the economy

The U.S. Commerce Department reported this week that personal spending was virtually unchanged in August. Spending has not been this weak since February, when it was also flat. Economists had forecast a 0.2 percent increase in personal spending.

Personal income, meanwhile, increased by 0.5 percent in August after a revised 0 (best payday loan).6 percent decline in July. Economists surveyed by Briefing.com were expecting income to grow 0.2 percent last month.

After adjusting for taxes and certain price changes, however, real disposable income contracted 0.9 percent, according to the report.

For more: http://www.commerce.gov.

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Hotel operator Marriott International Inc (MAR.N: Quote, Profile, Research, Stock Buzz) said on Thursday third-quarter profit fell 28 percent as its time-share business slowed, and the company warned that 2009 would be tough, sending its shares down more than 10 percent.

The hotel operator also said it may delay or cancel some projects in the current quarter, which may lead to write-offs.

“Our timeshare business has certainly been far more impacted by the current financial environment than our core lodging business,” said Marriott Chairman and Chief Executive J.W. Marriott in a statement.

“Tight credit, soft consumer spending and a difficult securitization market have lowered our expectations for the fourth quarter and 2009,” Marriott added.

Marriott, which typically manages hotels instead of owning them, reported third-quarter net income of $94 million compared with $131 million in the year-ago quarter, and earnings per share of 26 cents compared with 33 cents a year ago.

Third-quarter revenue rose 1 percent to $3 billion.

Marriott said it expects to earn between 44 cents and 50 cents a share in the fourth quarter online payday advance. That is below analysts’ average forecast of 62 cents, according to Reuters Estimates.

The company expects worldwide revenue per available room (RevPAR), a key industry measure, to decline 1 percent to 3 percent in the fourth quarter. 

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Nevada-based Papa Bello Enterprises is selling its development rights for the state of Tennessee to Phoenix Rising Development LLC.

Papa Bello owns and operates franchisees of Italian style eateries and has 17 stores.

The contract with Phoenix, which also owns the rights to South Carolina, includes the acquisition of a Papa Bello’s corporate store in Cleveland, Tenn cashadvance.

"This agreement represents a substantial enhancement to fulfilling our expansion plans in the southeastern region of the country,” says Phoenix Rising CEO Chase Canfield.

Terms of the deal were not disclosed.

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