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Citigroup Hosts Investors for First Time Since the Financial Crisis

For the first time since receiving three government bailouts during the 2007-09 financial crisis, Citigroup Inc. is holding a day-long conference for investors, marking another step in the recovery of what was once the biggest U.S. bank, Reuters reported today. Today’s meeting in New York comes four weeks after the Federal Reserve said it would allow Citigroup to begin to trim back the extra capital it has built up since the crisis. Citigroup is now the fourth-biggest U.S. bank, with $1.82 trillion of assets at the end of June, down from $2.2 trillion when Citigroup last held an "Investor & Analyst Day," in May 2008. In the meantime, the bank has sold and closed businesses around the world. Earlier this month CEO Mike Corbat said that he would use the revived conference to "go into a lot more detail" on how Citigroup will reach his goal of producing profits in 2019 that amount to 10 percent of Citigroup's tangible common equity.

Payless Reorganization Plan Wins Court Approval

Payless ShoeSource Inc.’s reorganization plan won court approval on Monday, moving the discount shoe retailer closer to exiting bankruptcy protection, The Wall Street Journal reported yesterday. The plan will allow Payless to eliminate 40 percent of its $838 million in funded debt from its balance sheet by giving lenders equity stakes in the company in exchange for debt forgiveness. Senior lenders, owed $506 million, will share in a 91 percent equity stake in the reorganized company, while junior lenders owed $145 million, are slated to take the remaining 9 percent stake. The nation’s largest footwear retailer, Payless sought bankruptcy protection in April. Unlike its competitors, Payless has closed only a portion of its 4,400 locations. Since the outset of the bankruptcy filing, Payless has planned to exit bankruptcy protection by August. The company will now be under the control of its senior and junior lenders.

Aquion Energy Emerges from Chapter 11

Aquion Energy Inc., a high-tech battery manufacturer, emerged from chapter 11 and will reopen this week, the Pittsburgh Business Times reported yesterday. The new investors are a majority-American joint venture. The company, which had received funding from the likes of Bill Gates and Kleiner Perkins, declared bankruptcy in March. Aquion also laid off 80 percent of its staff then.

Greece Looks to Turn a Corner After Years of Economic Pain

Greece is trying to prove that it has made progress in its recovery efforts by announcing plans to sell debt for the first time in years, The New York Times reported yesterday. The proposed bond sale offered hope that Greece might at last be preparing to wean itself off the international bailouts totaling 326 billion euros, or about $380 billion, that it has relied on since 2010 to stay afloat. The sale is a pivotal moment in the painfully fought efforts of Greece to recover from troubles stemming from the financial crisis that began on Wall Street nearly a decade ago and that at one point threatened to break up Europe’s currency union. If investor interest is strong, it would be a landmark moment, not only for Greece but also for the Eurozone. If Greece struggles to find buyers, however, the debt sale could represent yet another blow for a country that has only recently started to see signs of a turnaround after nearly veering out of the currency union just two summers ago.

IRS Doled Out More Than $24 Billion in Potentially Bogus Refunds, Audit Says

The IRS doled out more than $24 billion in potentially bogus refunds claimed under several controversial tax credits in 2016, according to a new audit that said $118 million was even paid to people who weren’t authorized to work in the U.S. in the first place, The Washington Times reported yesterday. Some $16.8 billion in payments were made on improper claims under the Earned Income Tax Credit, signifying a 24 percent error rate. Investigators also estimated $7.2 billion in improper payments for the Additional Child Tax Credit, representing 25 percent of the total, and $1.1 billion in improper payments, or 24 percent, for a higher education tax credit. The totals and error rates for the earned income and child credits were comparable for 2015, while the education tax credit saw improvement. One particular problem the IRS faces is checking people who have Social Security numbers but who aren’t authorized to work in the U.S.

Chef Thomas Hauck Files for Bankruptcy After Karl Ratzsch Closing

Milwaukee-area chef and restaurant owner Thomas Hauck has filed for bankruptcy after closing German restaurant Karl Ratzsch earlier this year, Biz Times (Milwaukee) reported yesterday. Hauck purchased the downtown Milwaukee restaurant in January 2016 and reopened it in mid-April of that year. He announced the closure of the restaurant on April 2, saying many factors went into the decision. In chapter 7 filings, Hauck and his wife listed assets of approximately $410,000 with more than $3.4 million in debts. Those debts include nearly $2.3 million owed to building owner Colby Abbot Building LLP for a business lease, along with $267,000 in personal loans from a family trust, roughly $120,000 to individuals on the restaurant management team who made business loans for the restaurant and trade debts to Miller Bakery, Purple Door Ice Cream and Usinger’s.
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