Subscriber Services |

Business News in Brief

Inquirer Staff Report

Posted: June 09, 2012

IN THE REGION

Berkshire sells ResCap bonds

Berkshire Hathaway Inc. sold its unsecured bonds issued by Residential Capital L.L.C., days after calling for a probe of the mortgage lender's pre-bankruptcy deals. ResCap has major operations in Fort Washington. A Berkshire investment manager disclosed the sale in a court filing Thursday. On June 4, Berkshire asked the judge overseeing ResCap's bankruptcy in Manhattan to approve an examiner to probe deals made before the company sought court protection, including transactions with its parent, Ally Financial Inc. Berkshire held more than $500 million of ResCap's unsecured bonds before the sale. The company sold them on June 5 and June 6, Berkshire's Ted Weschler said, without disclosing prices. Berkshire still holds more than $900 million of ResCap's junior secured bonds, according to the filing. Prices for three of ResCap's unsecured bonds rose on June 5 after Berkshire asked for an investigation, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. — Bloomberg News

ELSEWHERE

J&J sets aside more for fines

Johnson & Johnson said late Friday afternoon that it increased to $600 million the amount of money it had set aside for the civil fines it expects to pay to the federal government, which is investigating the company. Federal prosecutors are looking at sales practices related to drugs such as the antipsychotic Risperdal and arrangements with nursing home pharmacy company Omnicare Inc. Previously, J&J said it had set aside $400 million. Bloomberg News reported that the federal government would want at least $1.8 billion to settle all of the allegations. — David Sell

U.S. trade deficit decreases

The U.S. trade deficit shrank in April, but only because a big drop in imports offset the first decline in U.S. exports in five months. The Commerce Department said that the trade deficit narrowed 4.9 percent in April to $50.1 billion. U.S. exports, which had hit a record the previous month, fell 0.8 percent to $182.9 billion. Imports, which also set a record in March, dropped an even faster 1.7 percent to $233 billion. The trade gap remains wide and could weigh on growth in the April-June quarter. — AP

Regulators close four banks

Federal regulators have seized four banks, one each in Illinois, North Carolina, South Carolina and Oklahoma, bringing to 28 the number of U.S. banks that have failed this year. The Federal Deposit Insurance Corp. said Friday that it closed Farmers & Traders State Bank in Shabbona, Ill., and Waccamaw Bank in Whiteville, N.C. Regulators also shuttered Carolina Federal Savings Bank in Charleston, S.C., and First Capital Bank in Kingfisher, Okla. By this time last year, 45 U.S. banks had failed. — AP