Finance and Economic

Attorney Diana Carey was appointed Thursday to act as trustee in the involuntary Chapter 11 personal bankruptcy of Mercer Island entrepreneur Frederick Darren Berg, according to court documents.

As trustee, Carey will be monitoring the operation of Berg’s companies and his personal assets.

Such appointments are not unusual, according to Mark Calvert, trustee in the separate Chapter 11 bankruptcy of a group of seven Meridian Mortgage Investors Funds operated by Berg guaranteed payday loans. Both cases were filed in the U.S. Bankruptcy Court for the Western District of Washington in Seattle.

“It gives people comfort when a trustee is involved that the value of the assets will be maximized for the benefit of the creditors,” Calvert said.

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First Commonwealth Financial Corp., Pittsburgh, has planned a public offering of $75 million of its common stock, according to a filing made with the Securities and Exchange Commission Monday. First Commonwealth (NYSE:FCF) said it intends to use the net proceeds for working capital and general corporate purposes.

Macquarie Capital Inc. and Stifel Nicolaus & Co. Inc. are serving as underwriters; First Commonwealth said it plans to grant them a 30-day option to purchase up to an additional 15 percent of the shares offered to cover over-allotments, if any.

First Commonwealth is based in Indiana, Pa., about 45 miles east of Pittsburgh. It has assets of $6.1 billion and operates 115 retail branches, 65 of them based in the Pittsburgh area.

Last Thursday, First Commonwealth reported second quarter net income of $13.5 million, or 15 cents per diluted share, compared with a loss of $18.6 million or 22 cents a year ago, and well above Wall Street’s average estimate of 5 cents.

For the six months ended June 30, First Commonwealth earned $374,000, compared with a $16.9 million loss for the first half of 2009. Earnings per share were zero; First Commonwealth posted a 20 cent loss per share for the first half of 2009.

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First Franklin Corp. slid to loss of $558,000, or a loss of 33 cents per share, in the second quarter of 2010.

In the same quarter a year ago, the Cincinnati-based bank recorded net income of $7,000, or 1 cent per share.

In a statement, CEO Jack Kuntz attributed the lower performance during the quarter to lingering effects of the recession. But he also noted a number of higher expenses and one-time charges, including a loan loss reserve increase of $260,000; an increase in compensation of $224,000; $175,000 in costs related to the company’s proxy fight with Lenox Wealth Management; and a $300,000 external fraud loss.

“Although the economic upheaval combined with other expense burdens has impacted our financial performance, I remain optimistic and encouraged by our core business metrics,” he said in a news release.

First Franklin’s net interest income increased to $1.7 million from $1.5 million in last year’s second quarter, he said.

First Franklin is the parent of Franklin Savings, which has seven banking offices around Hamilton County and is the 18th-largest bank in Greater Cincinnati.

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Sonnenschein Nath & Rosenthal LLP, a law firm based in Chicago, will combine with London-based Denton Wilde Sapte LLP if partners vote to approve.

The combined firm will be known as SNR Denton and will have more than 1,400 lawyers in 18 countries. The heads of each firm will serve as co-chief executive officers, according to the joint statement.

If approved, it will be the second major combination of a U.S. and U.K. firm in the past year. On May 1, Washington-based Hogan & Hartson and London-based Lovells LLP joined to create Hogan Lovells, a 2,500-lawyer firm with about 40 offices, according to its website.

"Looking back in history, it is relatively rare to see transcontinental mergers," said Kent Zimmermann, a consultant with Zeughauser Group. "It’s been telling that there have been two recently. Globalization is the number one thing affecting the economy, and the number one thing affecting law firms."

Sonnenschein Nath & Rosenthal has had a St. Louis area office since 1990. It opened with one lawyer but now has nearly 50 lawyers on staff, said Jennifer A. Marler, the local office’s managing partner.

The firm’s partnership with Denton would have no immediate effect on the St. Louis office, she said.

Marler said she was pleased that the agreement would give the firm an international base of lawyers from whom to seek advice and counsel, and could help create future growth options for the firm as a whole.

Denton handles work for clients in energy, transport and infrastructure, financial institutions, real estate and retail and technology, media and telecommunications sectors, according to the firm’s website. It has offices in the Middle East, Europe and southeast Asia.

Robert Kelly of the Post-Dispatch contributed to this report.

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It turns out that Google isn’t the only U.S. tech company that’s fed up with China.

Go Daddy, the Internet domain registration site, announced Wednesday it is no longer offering new ".cn" Chinese Web domains, citing tough new government rules requiring extensive personal information from applicants.

The move makes Go Daddy the first U.S. Internet company to shut down some of its business in China after Google shipped off its Chinese search site to Hong Kong on Monday. Like Google (GOOG, Fortune 500), Go Daddy said access to its site has been spotty in China since its announcement.

At a hearing held by the Congressional-Executive Commission on China, Go Daddy’s general counsel, Christine Jones, told lawmakers that China recently implemented new laws requiring Go Daddy to collect color headshot photos, business ID numbers and signed registration forms from new registrants of ".cn" domain names. Go Daddy, in turn, was required to surrender that information to government authorities.

Jones said China’s new rules also applied retroactively, so the company would have to go back to Chinese customers that had already registered, asking them to provide photos, business ID numbers and registration forms.

China’s Internet Network Information Center (CNNIC), the government-controlled Internet regulator, informed Go Daddy that if existing customers did not comply, their domain names would no longer work.

"We were immediately concerned about the motives behind the increased level of registrant verification being required by CNNIC," said Jones in her testimony cash advances pay day loan. "The intent of the new procedures appeared, to us, to be based on a desire by the Chinese authorities to exercise increased control over the subject matter of domain name registrations by Chinese nationals."

Go Daddy found that its users weren’t willing to play along: Only about 20% of Go Daddy’s 27,000 affected customers submitted the required documentation and gave Go Daddy the OK to submit it to the Chinese authorities, Jones said. As a result, the company anticipated that thousands of Web sites registered by Go Daddy could be disabled by the Chinese government.

The company said it would continue to host and provide services to its existing customers with ".cn" addresses. Jones told lawmakers that the company would consider providing new ".cn." addresses if the Chinese government rescinds its new law.

Go Daddy was widely applauded by lawmakers for its actions in China, as was Google. The same can’t be said for Microsoft (MSFT, Fortune 500): at the hearing, Rep. Chris Smith, R-N.J., accused the company of "enabling tyranny" for continuing to censor search results in China.

Known for its sex-themed television commercials, Go Daddy is the largest Internet domain registration site in the world, managing more than 40 million domain names. Go Daddy also hosts about 7 million Web sites. Go Daddy began its business in China in 2005. 

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TotalBank wants to seize a Hialeah Gardens service station and restaurant.

The Miami-based bank filed a foreclosure action on Monday against Nu Nez Realty Co. and managing members Enrique Nunez, Carmen Nunez, Armando Abreu and Lourdes Abreu, according to Miami-Dade County Circuit Court records. It’s over a mortgage last modified at $3.2 million in March 2009.

Nu Nez Realty bought the 10,257-square-foot center for $4.8 million in 2005 with help from a TotalBank loan. The tenants include a Shell service station and Mima’s Cocina Restaurant, which is registered to Armando Abreu and Lourdes Abreu guaranteed fast personal loans. The restaurant was named in the foreclosure action, but the gas station was not.

Miami attorney Manuel Garcia-Linares, who represents TotalBank in the lawsuit, did not immediately return a call seeking comment.

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Greece replaced its debt management chief as declines in the country’s bonds roil European markets.

Petros Christodoulou, general manager of treasury and global markets at National Bank of Greece SA, the country’s biggest lender, will take over from Spyros Papanicolaou as head of the Athens-based Public Debt Management Agency, the country’s Finance Ministry said yesterday in an e-mailed statement.

“The incoming guy is walking into a tough mandate,” said Charles Diebel, senior interest-rate strategist at Nomura International Plc in London. “Such is the sentiment towards Greece at the moment, a new broom could be a positive.”

Greek bonds have slumped in the past two months, driving yields to the highest in 10 years, on concern the government will struggle to narrow a budget deficit that is more than four times the European Union limit. Prime Minister George Papandreou’s government needs to sell 53 billion euros ($72 billion) of debt this year, the equivalent of 20 percent of gross domestic product.

Papanicolaou, a former central bank official, was appointed general director of the debt office by the previous New Democracy government in January 2005. His predecessor, Christopher Sardelis, had held the role since 1999, when the organization was created.

“I’m not stepping down,” Papanicolaou said in a telephone interview yesterday. “It’s normal” that a new government changes staff, he said. “It’s a long tradition. Whether it’s good or not, that’s another story,” he said.

Rising Yields

The Greek government is under pressure to show that it can reduce a budget deficit that was equivalent to 12.7 percent of gross domestic product last year after the EU this week stopped short of offering financial support.

The yield on Greek two-year notes has remained above 5 percent, the highest in the euro region, even after officials this week urged the nation to reduce the deficit. The premium investors demand to hold the notes instead of benchmark German securities has held above 4 percentage points, the most since the Mediterranean nation joined the euro and more than 10 times its 37 basis point average the past decade.

The yield on two-year Greek government notes yesterday rose 31 basis points to 5.67 percent. The 10-year bond yield added 16 basis points to 6.54 percent.

“It’s a very challenging job,” Papanicolaou said. “We are going through a very difficult period.”

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For the first time in a decade, Pennsylvania's bridges are actually getting healthier. That is, the number of structurally deficient bridges has decreased from a high of 6,035 in 2008 to 5,646, according to the latest rankings from the state's Department of Transportation.

Pennsylvania's focus on bridge repair has been building, beginning with the accelerated bridge program which identified 411 needy structures for repair in 2009, but actually bid 470 with another 403 bridges expected to be under contract by the end of the fiscal year.

When the federal Recovery Act came around in early 2009, dishing out $1.026 billion for transportation infrastructure to Pennsylvania, the state quickly identified another 476 crossings for repairs fast cash.

"We're making headway," said PennDOT spokesman Rich Kirkpatrick.

But much more work, not least of which will involve securing funding for bridge repairs, remains ahead.

The state is working against an infrastructure that's older than in most other parts of the country.

Almost half of its 25,322 bridges were built 50 years ago or more.

That's more than twice the national average.

Click here for a searchable database of Pennsylvania's bridges, and their current conditions.

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Home Depot Inc posted a higher-than-expected quarterly profit and raised its full-year outlook as the top home improvement chain cut costs to offset weak demand for big-ticket remodeling projects.

Although the company is seeing “some positive signs of stabilization,” Chief Executive Officer Frank Blake warned there was “still a great deal of pressure” in the housing and home improvement markets.

Home Depot and smaller rival Lowe’s Cos Inc have suffered from the prolonged U.S. housing slump. On Monday, Lowe’s said it did not expect a market recovery to begin until the middle of 2010.

Home Depot said net profit fell to $689 million, or 41 cents a share, in the third quarter ended on November 1 from $756 million, or 45 cents a share, a year earlier.

Analysts on average were expecting earnings of 36 cents per share, according to Thomson Reuters I/B/E/S.

Sales fell about 8 percent to $16 low cost payday loans.36 billion, beating the analysts’ average forecast of $16.28 billion.

Home Depot has been quicker to cut costs and constrict inventory levels than Lowe’s, and in some cases has benefited as housing markets improved in regions where it has a heavy presence.

Same-store sales fell 6.9 percent in the third quarter, with those at U.S. stores down 7.1 percent.

For the full year, Home Depot sees earnings of about $1.55 a share from continuing operations before items, down about 13 percent from the prior year. It had earlier forecast a decline of 15 percent to 20 percent.

Home Depot said it still expected sales to fall by about 9 percent this year.

(Reporting by Dhanya Skariachan; Editing by Lisa Von Ahn)

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New orders for long-lasting U.S. manufactured goods fell in August and sales of new homes rose below expectations, government data showed on Friday, fanning fears that recovery from recession would be anemic.

The Commerce Department reports overshadowed a jump in consumer confidence this month to its highest since January last year and were the latest indication that growth could taper off once the government stimulus expired.

Durable goods orders tumbled 2.4 percent in August, the largest percentage decline since January, after rising 4.8 percent in July, the Commerce Department said. That was well below market expectations for a 0.5 percent rise in August.

In another report the department said sales of newly built single-family homes rose 0.7 percent in August for a fifth straight month, to a 429,000 unit annual pace, the highest since September last year. However, the increase was below market expectations for a 440,000 unit rate.

“The trend is continuing to be positive, but not gigantically robust for growth because we don’t have a lot of consumer spending going on,” said Kurt Karl, head of economic research and consulting at Swiss Re in New York.

U.S. stocks fell on the data, which, coming a day after a survey showed a drop in existing home sales in August, served as a reminder that recovery from the worst recession since the 1930s would be protracted and bumpy.

Government bond prices rose on the news.

“While the recovery is gaining momentum, there are a number of major speed bumps on the horizon,” said Brian Bethune, chief U.S. financial economist at Global Insight in Lexington, Massachusetts.

“These include the expiry of fiscal stimulus measures supporting the housing market in November and uncertainty about the potential impact of the Federal Reserve’s ‘exit strategy’ availability of credit to critical areas such as auto and mortgage finance.”

Federal Reserve Chairman Ben Bernanke said on Friday consumer and small business loans remained in great need of the U.S. central bank’s support even as use of other financial backstop programs tapered off as markets regained balance.

Leaders from the Group of 20 rich and developing countries meeting in Pittsburg pledged to keep emergency economic support in place until sustainable recovery was in place, according to a draft communique obtained by Reuters.

AIRCRAFT HIT DURABLE GOODS

The drop in durable goods orders, a leading indicator of manufacturing activity, was largely caused by a decline in new orders for commercial aircraft — likely reflecting a drop in orders received by Boeing.

Still, new durable goods orders excluding transportation were flat in August after rising for three straight months, the Commerce Department report showed. The market had expected a 1 percent gain after a 1.1 percent rise in July.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, unexpectedly fell 0.4 percent in August — confounding market forecasts for a 1.3 percent rise. Core capital goods fell 1.3 percent in July. 

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