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Sempra Energy to Buy Oncor for $9.45 Billion

Sempra Energy said that it will buy Oncor for $9.45 billion in cash after Energy Future Holdings Corp, which indirectly owns Oncor, abandoned a deal to sell the power transmission company to Warren Buffett's Berkshire Hathaway Inc., Reuters reported today. San Diego-based Sempra expects to own about 60 percent of a reorganized Energy Future after the transaction that is valued at $18.8 billion, including Dallas-based Oncor's debt, it said late on Sunday. In July, the energy unit of Berkshire Hathaway agreed to buy Oncor for $9 billion, but the deal ran into trouble after Energy Future's biggest creditor Elliott Management Corp opposed the sale arguing it undervalued Oncor. Elliott also tried to put together its own bid for $9.3 billion to buy Oncor. Separately, Berkshire said last week that it would not be raising its offer for Oncor, which delivers power to more than 3.4 million homes and businesses.

CFPB Defends Going to State Regulators As Court Stalls Subpoena

The Consumer Financial Protection Bureau on Wednesday defended its authority to request records about a company from state regulators even as a federal appeals court blocks an agency subpoena demanding records from the targeted business, the National Law Journal reported on Friday. In a court filing earlier this month, pension advance provider Future Income Payments said that the CFPB was demanding information from state authorities that the company provided “generally under confidentiality restrictions.” The California-based firm, which provides consumers with lump sum payments in exchange for all or a portion of their future pensions, said the CFPB was seeking “confidential and sensitive information” in spite of a ruling by the U.S. Court of Appeals for the Ninth Circuit that stayed a federal district judge’s decision ordering Future Income Payments to respond to the bureau’s subpoena.

Commentary: Strangling Puerto Rico in Order to Save It

The Puerto Rican economy has already suffered a lost decade — no economic growth since 2005, according to an op-ed in Saturday’s New York Times. The poverty rate is 46 percent, and 58 percent for children — about three times that of the 50 states. Unemployment is at 11.7 percent, more than two and a half times the level in the states. Employment has plummeted, and about 10 percent of the population has left the island since 2006. As revenues fell with the economy over the past decade, the island’s government increased borrowing in an attempt to maintain levels of economic activity and social spending. Puerto Rico ended up with $73 billion in debt that it couldn’t pay, and it officially defaulted in 2015. The U.S. government should ensure that the creditors who made foolish loans or bought Puerto Rico’s bonds at a steep discount do not profit from those decisions, according to the op-ed. Read the full op-ed

For updated news and analysis of Puerto Rico's debt crisis, along with current docket filings in Puerto Rico's case, be sure to visit ABI's "Puerto Rico in Distress" webpage.

Commentary: Strangling Puerto Rico in Order to Save It

The Puerto Rican economy has already suffered a lost decade — no economic growth since 2005, according to an op-ed in Saturday’s New York Times. The poverty rate is 46 percent, and 58 percent for children — about three times that of the 50 states. Unemployment is at 11.7 percent, more than two and a half times the level in the states. Employment has plummeted, and about 10 percent of the population has left the island since 2006. As revenues fell with the economy over the past decade, the island’s government increased borrowing in an attempt to maintain levels of economic activity and social spending. Puerto Rico ended up with $73 billion in debt that it couldn’t pay, and it officially defaulted in 2015. The U.S. government should ensure that the creditors who made foolish loans or bought Puerto Rico’s bonds at a steep discount do not profit from those decisions, according to the op-ed. Read the full op-ed

For updated news and analysis of Puerto Rico's debt crisis, along with current docket filings in Puerto Rico's case, be sure to visit ABI's "Puerto Rico in Distress" webpage.

Analysis: Why Lawsuits Targeting Stock Drops Are on the Rise

More that 130 class-action securities suits were filed in federal court in the first six months of the year, a historic high, according to data from Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse, the Wall Street Journal reported today. The volume, which doesn’t include suits challenging mergers and acquisitions, is higher than in any equivalent period since the Clearinghouse began tracking data in 1996, following the passage of landmark securities-litigation legislation. Under securities laws, investors can sue to recoup losses after a stock drops by proving a company or its employees fraudulently misstated or withheld information that would have been material to buying or selling shares. Industry watchers say the rise is being driven by enterprising plaintiffs’ firms bringing more, arguably weaker cases under the perceived strategy that companies will settle early to make a case go away. Advisers are alerting clients that in the current era, every company, from small-cap to corporate giants, needs a plan for defending against fraud accusations following investor losses.

Russian-Backed Battery Maker Alevo Filing for Bankruptcy

The U.S. arm of Alevo, the cash-strapped Swiss battery maker with a high-profile Russian investor, said on Friday that it was filing for chapter 11 protection, the Charlotte Observer reported on Saturday. The company arrived in Cabarrus County, N.C., in 2014 with great fanfare, vowing to create hundreds of jobs through its revolutionary energy-storage technology. But production and hiring lagged those projections. The company gained attention this spring when a Russian billionaire with a connection to President Donald Trump emerged as a new investor and installed former associates at the company. In a statement, Alevo said it had made progress with its “groundbreaking battery technology,” but production challenges left it short on financing. It had been actively seeking new funding, but it wasn’t realized in time. The company planned to lay off 245 employees on Friday, followed by the remaining 45 by Sept. 30, according to a notice filed with the state. The company plans to immediately sell off assets, the filing said.

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