News Briefs II
Orange County to Regain SolvencyLos Angeles Times
California's Orange County won over a reluctant Wall Street Wednesday, clearing the final hurdle in its efforts to emerge from the nation's largest-ever municipal bankruptcy filing.
Buoyed by strong demand from both East Coast bond funds and well-heeled California investors, the county successfully sold $880 million of bonds, giving it just enough money to pay back its bondholders, vendors and other creditors.
"We're very, very pleased," said Jan Mittermeier, Orange County's chief executive officer, who flew to New York for the bond sale. "We have been able to overcome this financial blow-up."
Cash from the bond sale will allow Orange County to emerge from bankruptcy protection next Wednesday, just 18 months after it filed under Chapter 9 of the U.S. Bankruptcy Code with $1.64 billion in losses from wrong-way interest rate bets by former county Treasurer Robert L. Citron.
"This marks the end of the bankruptcy," said Christopher Varelas, a vice president with Salomon Bros., which is advising the county on the sale. "But more importantly, this validates the county's efforts to limit costs by emerging so quickly and paying all creditors 100 cents on the dollar."
Still, the exit price wasn't cheap.
Orange County's bonds were priced to yield 0.10 to 0.25 of a percentage point more than other similarly rated bonds, meaning county taxpayers paid roughly $43.8 million extra in borrowing costs, according to data from Zane Mann, publisher of California Municipal Bond Advisor, a newsletter in Palm Springs.
Disney Linked to Sweatshops in HaitiLos Angeles Times
Mickey Mouse, one of the few American faces more famous than Kathie Lee Gifford's, will be the next target of the National Labor Committee, the small, New York-based worker rights group that first linked the talk-show host to sweatshop labor.
"Our next campaign is Disney; I've already sent a 13-page letter to (Walt Disney Co. CEO) Michael Eisner," Charles Kernaghan, the committee's executive director, said in an interview Wednesday. "Disney has sweatshops in Haiti that pay starvation wages with inhumane conditions."
Kernaghan's allegations refer to two U.S. apparel manufacturers under contract to produce children's clothing with the Disney label.
Disney has been denying such allegations since January, when the committee first made them public in a report titled "The U.S. in Haiti. How to Get Rich on 11 Cents an Hour."
Disney spokesman Chuck Champlin said the charges are disputed by not only its manufacturers in Haiti, but also by the U.S. State Department.
Champlin cited a recent letter from a State Department official to Rep. Richard Gephardt, D-Mo. The letter said that based on unannounced visits, the U.S. embassy staff in Haiti found "a pattern of widespread compliance with minimum wages laws with most workers earning substantially more than the minimum wage."
Champlin also said that Disney representative had been to Haiti to verify that the factories are following the laws and are properly maintained.