The hedge fund manager William A. Ackman has stepped down from the board of J.C. Penney, after a public clash with his fellow directors, the company announced on Tuesday morning. In its statement, Penney said that it had added Ronald W. Tysoe, a former vice chairman of Federated Department Stores, to its board, and said it planned to add another director in the near future.
“During my time on the J. C. Penney board of directors, I have always advocated for what I believe to be in the best interests of the company â€" its stockholders, employees and others,†Mr. Ackman said in a statement. “At this time, I believe that the addition of two new directors and my stepping down from the board is the most constructive way forward for J.C. Penney and all other parties involved.â€
Mr. Ackman, the largest shareholder of Penney through his firm Pershing Square Capital Management, urged the board last week to hire a new, permanent chief executive to succeed Myron E. Ullman III. That prompted a forceful riposte from the company’s chairman, and the ensuing feud became the latest problem at Penney, which is struggling to revive sales.
DEBATING WHO SHOULD PAY LEGAL BILLS  | With the current spate of prominent Wall Street white-collar cases, the question of who should foot the legal bill has become an increasingly common one, Andrew Ross Sorkin writes in the DealBook column. “The implication of who is â€" or who is not â€" paying legal fees could have a large effect on the defense’s strategies for defendants.â€
Goldman Sachs paid several million dollars to defend, unsuccessfully, its former trader, Fabrice Tourre, in his civil fraud case. Even though he lost, the firm is not seeking reimbursement, Mr. Sorkin reports. In contrast, Goldman, after spending more than $35 million on the legal fees for a former director, Rajat K. Gupta, who was convicted in criminal court of insider trading, is seeking to be repaid.
SAC Capital Advisors is paying for some of its traders ensnared in the continuing criminal insider trading investigation surrounding the firm, but not others, Mr. Sorkin writes.
“There is no absolute rule or law that says a company must pay defense fees for its employees,†Mr. Sorkin writes, “but Delaware law â€" where most companies are incorporated â€" allows legal fees to be paid and in certain cases has required it on the theory that it is good public policy to protect employees from lawsuits that result from work that advances the interests of the employer.â€
A SUBPRIME MORTGAGE BOND’S STORY  | Six years after the peak of the housing boom, when Wall Street packaged subprime mortgages and sold them to investors, hundreds of thousands of subprime borrowers continue to struggle. DealBook’s Peter Eavis traces the story of one mortgage bond in particular, GSAMP Trust 2007 NC1.
This bond, created by Goldman Sachs, “became toxic as soon as it was completed. The mortgages slid into default at a speed that was staggering even for that era,†Mr. Eavis writes. “Despite those losses, that bond still lives. It has undoubtedly left its mark on ordinary borrowers. But the impact of the deal spread ever further. It touched the bankers who sold the deal. It even landed on taxpayers, who ended up owning a large slice of the Goldman bond.â€
ON THE AGENDA  | Data on retail sales in July is out at 8:30 a.m. SeaWorld Entertainment reports earnings after the market closes. David Kostin, Goldman Sachs’s chief United States equity strategist, is on Bloomberg TV at 10:05 a.m.
BLACKBERRY’S DWINDLING OPTIONS  | BlackBerry Ltd. said on Monday it was seriously considering selling itself. “But it is not clear that anyone will want to pay up,†Michael J. de la Merced and Ian Austen write in DealBook. “Analysts and industry executives said that a sale of the entire smartphone maker was increasingly unlikely, and almost certainly at least a year too late.â€
“Investors have speculated that an embattled BlackBerry may prove attractive to a private equity firm. The company’s financial state is fairly clean: it has nearly $3 billion in cash and short-term investments. And it carries no debt, suggesting that it can support the financing that a leveraged buyout would require,†DealBook writes. “But that assumes a financial firm would be willing to shoulder the enormous risk that fixing a fading smartphone maker â€" one that competes with the iPhone and an army of Android-based devices â€" would entail.â€
Hospital Mergers May Lead to Bigger Bills for Patients  | After holding steady through much of the 2000s, deal-making has picked up in health care, raising concerns about the power of large hospital systems, Julie Creswell and Reed Abelson write in The New York Times. NEW YORK TIMES
Blackstone Is Said to Buy Apartments From G.E.  | The investment firm has agreed to buy control of 80 apartment complexes from General Electric, valuing the properties at about $2.7 billion, a person briefed on the matter said on Monday. DealBook »
Dole’s Chief to Buy Out Company for $13.50 a Share  | The chief executive of the Dole Food Company has agreed to buy full control of the fruit and vegetable producer, valuing the company at about $1.6 billion, including debt. DealBook »
Steinway Says It Has Received a Higher Bid  | The maker of Steinway & Sons pianos says it has received an offer of $38 a share - nearly 9 percent higher than an earlier bid - from an unidentified affiliate of a large investment firm. DealBook »
Mystery Steinway Bidder Identified as Paulson  | Paulson & Company is the firm behind the $38-a-share bid for Steinway, The New York Post reports. NEW YORK POST
Extreme Reach to Buy Digital Generation’s TV Business  | Extreme Reach is paying $485 million for the TV business of Digital Generation, an advertising distribution company, Reuters reports. REUTERS
Barclays Said to Consider Sale of U.A.E. Banking Business  | Barclays is “is conducting a strategic review of its retail banking operations in the United Arab Emirates,†which could lead to a sale of the business, Reuters reports, citing unidentified people familiar with the matter. REUTERS
Rise of the ‘Boring’ Bank Chief  | “Large banks, burned by years of scandal, often with swashbuckling C.E.O.’s at the helm, are turning to new bosses who sport well-polished veneers of boringness,†The Wall Street Journal writes. “The goal is to avoid further controversy.†WALL STREET JOURNAL
Icahn Enterprises Suggests Following Carl Icahn on Twitter  | “We encourage investors, the media, and others interested in our company to review the information that Mr. Icahn posts on Twitter,†Carl C. Icahn’s firm said in a statement on Monday. NEWS RELEASE
CVC Capital to Buy Extended Warranty Company  | Advent International, a European private equity firm, agreed to sell Domestic and General, an extended warranty company, to CVC Capital Partners for about $1.2 billion. DealBook »
Campbell Soup to Sell Some European Operations  | CVC Capital Partners is in talks to buy the Campbell Soup Company’s operations in France, Germany, Sweden and Belgium. DealBook »
Goldman Buys Into Spanish Real Estate  | The private equity arm of Goldman Sachs, along with the investment group Azora, bought a portfolio of residential apartments from the regional government of Madrid for 201 million euros, or about $267.6 million, The Financial Times reports. FINANCIAL TIMES
Co-Founders of Diamondback Return to Hedge Fund Business  | Two principals of Diamondback Capital Management, which was closed last year after large redemption requests, are each planning new hedge funds focused on equities, Absolute Return reports. ABSOLUTE RETURN
Former Goldman Managing Directors Plan Hedge Fund in Asia  |Â
BLOOMBERG NEWS
M&G Chemicals Said to Plan Hong Kong I.P.O. Â |Â M&G Chemicals, an Italian company that makes polyethylene terephthalate, is aiming to raise about $500 million in an initial public offering in Hong Kong, The Wall Street Journal reports, citing two unidentified people with knowledge of the deal. WALL STREET JOURNAL
Personnel Changes at U.S. Venture Partners  | Winston Fu, a longtime general partner at U.S. Venture Partners, has left the firm, along with the partner Chris Rust and the venture partner Emily Melton, Fortune reports. FORTUNE
SAC Capital Closes a Trading Unit as It Starts to Retrench  | The closure is the latest setback for SAC Capital, the once-powerful hedge fund run by the billionaire Steven A. Cohen that has been hobbled by a criminal indictment. DealBook »
U.S. Subpoenas Goldman in Inquiry of Aluminum Warehouses  | The investigation is focused on the storage of aluminum by Goldman Sachs and other companies, which beverage makers say is distorting the market, David Kocieniewski reports in The New York Times. NEW YORK TIMES
Suit Accuses Online Lender of Violating New York Rate Caps  | The New York attorney general sued Western Sky Financial and its affiliates, which claim ties to American Indian tribes that exempt them from state restrictions on interest rates. DealBook »
For S.E.C., Any JPMorgan Settlement Could Serve as a Template  | Requiring the bank to admit to violations of the securities laws in the case of the so-called London Whale could be a guide for how to handle such Wall Street cases, Peter J. Henning writes in the White Collar Watch column. White Collar Watch »
