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Zipcar Makes S.E.C. Filing After Executive\'s Twitter Message

Scott Griffith, the chief executive of Zipcar, was still riding high on Friday, two days after Avis announced that it was buying his company for $500 million. He appeared on CNBC to discuss the sale, and then showed further enthusiasm for the deal - and the publicity surrounding it - by posting on Twitter:

Mr. Griffith's 86-character message, however, created extra work for the legal department at Zipcar, which by the end of the day Friday had made a filing with the Securities and Exchange Commission disclosing it to Zipcar's investors.

Zipcar's short 8-K filing said:

On January 4, 2013, Scott Griffith, chairman of the board of directors and chief executive officer of Zipcar, Inc. (“ Zipcar ”), posted communications on Twitter regarding the announcement on January 2, 2013 by Zipcar and Avis Budget Group, Inc. (“ Avis ”) of the execution of an Agreement and Plan of Merger among Zipcar, Avis and Millennium Acquisition Sub, Inc. (the “ Transaction ”). A copy of Mr. Griffith's communications posted on Twitter is filed as Exhibit 99.1 hereto and is incorporated herein by reference. A copy of the article, dated January 3, 2013, appearing in The Boston Globe to which Mr. Griffith's communications refers is filed as Exhibit 99.2 hereto and is incorporated herein by reference.

Zipcar's filing also mentioned that Mr. Griffith appeared on CNBC to discuss the Avis deal, and attached a copy of the transcript of Mr. Griffith's discussion with the program's hosts.

The unusual filing by Zipcar comes a month after the Securities and Exchange Commission told Netflix that it was considering filing a lawsuit against the movie-rental company related to a Facebook post by its chief executive, Reed Hastings. In the post, Mr. Hastings congratulated his team for a job well done in early July, and trumpeted the one billion hours of video that subscribers watched the previous month. The message was just 43 words.

In the Netflix situation, the S.E.C. said it was concerned about whether by posting the information on Facebook instead of a broadly issued news release, Mr. Hastings was disclosing material information to select investors. In so doing, Mr. Hastings potentially violated the Regulation Fair Disclosure rule, commonly known as Reg FD, which requires a company to announce information that is material to its business to all investors at the same time.

Zipcar says it made the S.E.C. filing about Mr. Griffith's Twitter message because the transaction with Avis is subject to Zi pcar's shareholder approval and securities laws dictate that the company must file with regulators any announcements that could be construed as soliciting shareholder votes.

Writing for DealBook last month about the Netflix case, Steven M. Davidoff criticized the securities laws for being somewhat outmoded in the social media age, and argued that executives' posting on Facebook and Twitter was a good thing.

“If the idea behind Regulation FD is to encourage disclosure, then allowing executives to comment freely on Facebook and Twitter, recognizing them as a public space akin to a news release, is almost certain to result in more disclosure, not less, and reach many more people than an S.E.C. filing would,” Mr. Davidoff wrote. “The agency's position will only force executives to check with lawyers and avoid social media, chilling disclosur e.”

In any case, Congress probably didn't have any of this in mind in 1934 when they passed the Securities Exchange Act.



Morgan Stanley Discloses Payouts to Senior Deal Maker

Morgan Stanley disclosed on Friday the timeline for some of its retirement awards to Paul J. Taubman, the senior deal maker who co-led its securities business.

As part of the awards, the deal maker will receive an accelerated payout from an executive retirement program that has a current estimated value of about $1.7 million.

His 2012 bonus compensation will also vest on May 5, the official last day of Mr. Taubman's 30-year career at the Wall Street firm. But he isn't exactly coming to work until then: he retired on Dec. 31.

Morgan Stanley said in a securities filing that the total amount of the awards is subject to a number of co nditions, including abiding by a noncompete agreement. (The provisions of Mr. Taubman's separation agreement effectively make May 5 the end of an unofficial “gardening leave,” since the executive wouldn't be entitled to a full payout if he takes a job at a rival or accepts work that would compete with the firm before then.)

The announcement of his departure last November left his co-head, Colm Kelleher, in charge of the firm's core securities business. The shift was made in part to give just one person responsibility for the businesses both of doling out advice on mergers and financing and on the trading of stocks, bonds and other securities.

Mr. Taubman is widely regarded as one of Wall Street's top deal mavens, having helped broker transactions like Comcast‘s takeover of NBC Universal and Morgan Stanley's emergency lifeline from the Mitsubishi UFJ Financial Group during the financial crisis of 2008.



\'Grey\'s Anatomy\' Star Would Be White Knight for Small Coffee Chain

He only plays a doctor on TV. But Patrick Dempsey is about to become a real-life coffee magnate.

The actor, best known for playing Dr. Derek Shepherd, the heartthrob nicknamed “McDreamy” on “Grey's Anatomy,” said on Friday that he had prevailed in an auction of Tully's Coffee, a bankrupt coffee chain based in Seattle.

His company, Global Baristas LLC, agreed to pay $9.15 million for the small coffeeshop chain. The total consideration, including noncash adjustments is closer to $10 million, Tully's chief executive, Scott Pearson, said in an interview on Friday.

Mr. Dempsey beat out a number of competitors, including the 800-pound gorilla in the coffee world, Starbucks. The 46-year-old actor was only to happy to crow about that in a Twitter post late Thursday night:

He also has been making the rounds at Tully's stores in Seattle, having posed for a picture with an employee at one store on Wednesday and taking a victory tour on Friday.

His bid must still be confirmed by the federal judge overseeing Tully's Chapter 11 case. A hearing on the auction's results is scheduled for next week at the federal bankruptcy court for the Western District of Washin gton.

The bid is a bit of a sidestep for Mr. Dempsey, whose “Grey's Anatomy” character is a top surgeon at a fictional Seattle hospital. (The show is largely filmed on a studio lot in the Los Angeles area.) While a racecar enthusiast, the coffee bid appears to be his first major entrepreneurial undertaking.

And Tully's makes for an unusual target. Founded in 1992, the company filed for Chapter 11 protection in October, suffering from a number of expensive leases that it has been otherwise unable to shed. As of late November, it had more than 500 branded retail stores, including about 119 in the United States.

But Mr. Dempsey, who was raised in Maine, has claimed a kinship with the rainy city, having raised money for Seattle Children's Hospital. Mr. Dempsey said in his statement that he decided to bid for Tully's a week before Christmas, after learning that many of the other bidders had plans to close many of the company's stores.

Coffee has also p roved a bit of a hot commodity among deal makers of late. The German conglomerate Joh. A. Benckiser spent $1.3 billion last year to buy two much bigger java purveyors, Peet's Coffee & Tea and Caribou Coffee.

Mr. Dempsey's stated main objective was to preserve as many Tully's jobs as possible. “I'm thrilled that we won and I'm even more excited about saving Tully's Coffee and its hundreds of jobs,” he said. “Seattle has been very good to me over my career, and I am honored to have the privilege to own Tully's and work closely with the company's employees.”

The actor added that he planned to spend more time in Seattle to supervise his latest venture.

Mr. Pearson, Tully's chief executive, said that the reaction to Mr. Dempsey's apparent victory has rallied morale within the company. The bid wo uld serve to pay off creditors and keep most of the retailer's employees.

“He plans on being very engaged and involved,” he said, cautioning that it's too early to unveil any immediate plans. “This is a 20-year-old company that needed a kickstart, and Patrick's really provided that.”



After Decades of Public Service, Judge Jones Joins Zuckerman Spaeder

Barbara S. Jones, the federal judge in Manhattan and former prosecutor, is stepping down from the bench to join the law firm Zuckerman Spaeder.

In an interview, Ms. Jones said that her last day as judge was on Friday and that she would start at Zuckerman Spaeder later this month.

“I've been in public service for more than 40 years, the last 17 on the bench,” Judge Jones said. “I'm ready to try something new.”

Judge Jones, 65, has never worked in a law firm, not even during a summer internship. A graduate of Temple University‘s law school, she spent the first half of her career as a prosecutor in three different offices - the Justice Department's organized crime strike force, the United States attorney's office in the Southern District of New York and the Manhattan district attorney's office. President Bill Clinton, acting on the recommendation of Senator Daniel Patrick Moynihan, nominated her for a judgeship in 1995.

She presided over a wide range of cases, including the 2005 trial of Bernard J. Ebbers , the former chief executive of WorldCom, and the 1997 trial of Autumn Jackson, a woman who tried to extort millions of dollars from the entertainer Bill Cosby. Both resulted in convictions.

Judge Jones also heard the Justice Department's civil lawsuit against Visa and MasterCard, finding that the credit card companies violated the antitrust laws.

While some defense lawyers viewed the former prosecutor as pro-government, many more say that Judge Jones has been evenhanded in her rulings. In Nove mber, she meted out relatively lenient sentences to three men from Mali who pleaded guilty to terrorism charges that involved a conspiracy supporting Al Qaeda. Justifying her sentence, she noted that the men were driven by financial motives and difficult family circumstances rather than ideology.

“Barbara is smart, dedicated and understands both the letter and objectives of the law,” said Mary Jo White, the former United States attorney in Manhattan and now a partner at Debevoise & Plimpton. “She also understands people and brings real humanity to everything she does.”

In Zuckerman Spaeder, Ms. Jones joins a la w firm that has expanded its Manhattan office over the past year. A litigation boutique with headquarters in Washington, the firm recently hired three prominent lawyers for its New York presence: Steven M. Cohen, a former top aide to Gov. Andrew M. Cuomo; Andrew Tomback, a former partner at Milbank, Tweed, Hadley & McCloy; and Paul Shechtman, a noted criminal defense lawyer who, as a young prosecutor, was supervised by Ms. Jones.

The firm has about 100 lawyers and is known for its criminal defense work. William W. Taylor, a partner in the firm's Washington office, was part of the team that successfully defended Dominique Strauss-Kahn, the former head of the International Monetary fund, against charges that he had sexually assaulted a hotel maid.

“Being able to attract a lawyer like Judge Jones validates what we have been doing since we relaunched the New York office,” Mr. Cohen said.

On the bench, Judge Jones was known for her efficiency, low-key manner and a wry sense of humor. She is also a very popular figure around the federal courthouse, partly because of the blowout holiday party that she throws most every year for the entire building. Judge Jones hosted her final bash two weeks ago, where she could be seen dancing amid the security guards and court reporters, and wearing a Santa hat emblazoned with the logo of her beloved New York Yankees.

“I've always been awed by the power and responsibility the comes with being a judge and don't expect to have that ever again,” Ms. Jones said. “But I've only been a government employee and never a pri vate citizen. I'm excited to go out into the world.”



More European Bank Loan Sales Expected

LONDON â€" At the start of 2013, European banks are cleaning out their closets.

The Continent's largest financial institutions, including HSBC and Deutsche Bank, are expected to sell a combined 60 billion euros ($78 billion) of so-called noncore loans this year, a 33 percent rise compared with 2012, according to estimates from the accounting firm PricewaterhouseCoopers.

The renewed effort to offload unwanted assets comes as European banks are eager to reduce costs and shrink their balance sheets to comply with tougher capital requirements demanded by regulators. Europe's persistent financial problems also have altered the industry's economics, leaving many ba nks with bloated balance sheets and reduced profitability.

The fire sale has already seen the Royal Bank of Scotland sell property loans to the private equity firm Blackstone Group and its aviation leasing business to Sumitomo Mitsui Financial Group, the Japanese bank, for $7.3 billion. British rival HSBC also is considering the sale of U.S. real estate and personal loans worth a combined $6 billion to outside investors.

PricewaterhouseCoopers said that it expected European banks would focus on corporate and real estate loan disposals, particularly in countries like Spain where prices in the local housing market fell 15 percent annually in the third quarter of last year, according to the latest available government figures.

While European banks are keen to sell, bankers and lawyers say financial institutions continue to demand high prices for assets despite the glut of loan portfolios currently up for sale. So far, analysts add that differences over price have kept potential buyers, including private equity firms that specialize in distressed assets, from picking up more underperforming loan assets because the firms believe they remain overvalued.

“In 2012, we saw a large number of different banks bringing their portfolios to market,” said Richard Thompson, a partner at PricewaterhouseCoopers in London. “The issue of price will clearly remain a key challenge in future for sellers.”

European ba nks still have a lot of work to do.

PricewaterhouseCoopers estimates that firms still have more than 2.5 trillion euros of noncore loans that they are looking to sell. As the 60 billion euro estimate for loan portfolio sales in 2013 represents just 2.4 percent of that total, Europe's banks are likely to remain eager sellers for many years to come.



Google\'s Antitrust Victory

GOOGLE'S ANTITRUST VICTORY  |  The Federal Trade Commission said on Thursday that Google had not violated antitrust or anticompetition laws in the way it arranges its search results - a major victory for the Internet giant after a nearly two-year investigation. The decision amounts to “a slap on the wrist,” The New York Times's Claire Cain Miller and Nick Wingfield write.

Edward Wyatt reports: “By allowing Google to continue to present search results that highlight its own services, the F.T.C. decision could enable Google to further strengthen its already dominant position on the Internet. It also enables Google to avoid a costly and lengthy legal war of attrition like the antitrust battle that Microsoft waged in the 1990s.” The decision may set up a conflict with officials in Europe, where Google is battling similar concerns.

The five members of the F.T.C. voted unanimously to close the investigation without bringing charges. “While not everything Google did was beneficial, on balance we did not believe that the evidence supported an F.T.C. challenge to this aspect of Google's business under American law,” Jon Leibowitz, chairman of the F.T.C., said. Mr. Wyatt writes: “Google did agree to make some minor changes to its search practices related to search advertising. The F.T.C. said those commitments were enforceable if the company violated them, b ut the agreement avoided a formal consent decree or litigation, weapons that the F.T.C. had available.”

In making their case to regulators, Google executives traveled to Washington and applied lessons learned from Microsoft's antitrust battle. The army of executives, lawyers, lobbyists and engineers argued “that technology is such a fast-moving industry that regulatory burdens would hinder its evolution,” and that the “definition of competition in the tech industry is also different and constantly changing,” people briefed on the discussions told The Times. Google spent $13.1 million on lobbying in the first three quarters of 2012, compared with $5.9 million in the period a year earlier, and the company's executive chairman, Eric E. Schmidt, has become a close adviser to Presid ent Obama.

NO CHARGES FOR FORMER BUFFETT AIDE  |  The Securities and Exchange Commission has ended its investigation of David L. Sokol, a onetime top lieutenant at Warren E. Buffett's Berkshire Hathaway, without filing insider trading charges, DealBook's Ben Protess reports. The decision not to pursue a civil enforcement action ends a chapter that began when Mr. Sokol resigned abruptly in 2011 as chairman of Berkshire's MidAmerican Energy Holdings. Mr. Sokol had bought shares of the lubricant maker Lubrizol about two months before Berkshire announced a $9 billion acquisition of the company, Berkshire revealed at the time. But after an investigation, “S.E.C. lawyers decided that there was insufficient evidence to mount a case against Mr. Sokol,” Mr. Protess reports. “The evidence was circumstantial, S.E.C. officials concluded, and it was unclear whether Mr. Sokol had a true window into the Lubrizol deal-making process.”

WEGELIN ADMITS TAX LAW VIOLATIONS  |  Wegelin & Company, Switzerland's oldest private bank, admitted on Thursday to helping Americans evade taxes, agreeing to pay $74 million in fines, restitution and forfeiture proceeds to the United States government. The admission was the first time a foreign financial institution has pleaded guilty to tax law violations, and it represents a victory for the Obama administration in its crackdown on tax evasion through offshore banks, DealBook's Peter Lattman reports.

Representatives for Wegelin acknowledged that for nearly a decade the firm helped wealthy Americans dodg e taxes by hiding more than $1.2 billion in secret accounts. “From about 2002 through 2010, Wegelin agreed with certain U.S. taxpayers to evade the tax obligations of these U.S. taxpayer clients, who filed false tax returns with the I.R.S.,” Otto Bruderer, a Wegelin partner, said in court. “Wegelin was aware the conduct was wrong.” Mr. Bruderer said the bank believed it would not be prosecuted in the United States because it had no offices there, adding that the conduct was common practice in the Swiss banking industry. Another Wegelin partner, Konrad Hummler, also appeared at the hearing in Federal District Court in Manhattan.

ON THE AGENDA  |  Jobs numbers for December are out at 8:30 a.m. The ISM non-manufacturing index for December and data on factory orders in November are out at 10 a.m.

POSSIBLE SUITORS FOR BAUSCH & LOMB  |  The eye care products maker Bausch & Lomb has attracted interest from suitors including Abbott Laboratories, Johnson & Johnson and Sanofi, Bloomberg News reports, citing unidentified people with knowledge of the matter. Warburg Pincus, the company's private equity owner, is said to be seeking more than $10 billion in a sale. Warburg, which is working with Goldman Sachs, is seeking first-round bids for Bausch & Lomb by the end of the month, according to Bloomberg. At $10 billion, a deal would give the private equity firm a gain o f more than 200 percent on its $1.7 billion equity investment, the news service says.

Mergers & Acquisitions '

Seeing Opportunity, WPP Adds to Its Investments in Latin America  |  Martin Sorrell, chief executive of the British advertising giant WPP, says he sees growth prospects in Latin America. The firm has taken a 20 percent stake in an information technology services company based in Argentina.
DealBook '

How Gore Got the Current TV Deal Done  |  When he decided in December to sell Current TV to Al J azeera for $500 million, Al Gore used “personal lobbying and arm-twisting” in convincing distributors to keep their contracts with the channel, the Media Decoder blog reports.
NEW YORK TIMES MEDIA DECODER

Barnes & Noble Reports Decline in Nook Sales  |  A week after a big investment by Pearson, Barnes & Noble says that revenue for its Nook unit â€" including e-readers, digital content and accessories â€" fell 12.6 percent, to $311 million, during the holiday shopping season.
DealBook '

Hormel to Buy Skippy Peanut ButterHormel to Buy Skippy Peanut Butter  |  The Hormel Foods Corporation said on Thursday that it had agreed to buy the Skippy peanut butter business from Unilever for $700 million.
DealBook '

INVESTMENT BANKING '

A Year of Bungled Predictions on Wall Street  |  Bloomberg News writes: “From John Paulson's call for a collapse in Europe to Morgan Stanley's warning that U.S. stocks would decline, Wall Street got little right in its prognosis for the year just ended.”
BLOOMBERG NEWS

Investors Skeptical of Actively Managed Stock Funds  |  The Wall Street Journal reports: “Investors are jumping out of mutual funds managed by professional stock pickers and shifting massive amounts of money into lower-cost funds that echo the broader market.”
WALL STREET JOURNAL

Santander Said to Be Cutting 3,000 Jobs After Merger  | 
REUTERS

Citigroup Hires Goldman Executive to Oversee Mexican Investment Bank  | 
BLOOMBERG NEWS

PRIVATE EQUITY '

Carlyle Seeks Financing for Purchase of DuPont Unit  |  The private equity firm is seeking $2.9 billion of loans, Bloomberg News reports, citing an unidentified person with knowledge of the transaction.
BLOOMBERG NEWS

HEDGE FUNDS '

Ackman Ends Push for Merger of Mall Companies  |  William A. Ackman dropped his efforts to encourage the Simon Property Group to buy General Growth Properties, but his firm is coming away with a 77-fold return on its investment in General Growth, Reuters reports.
REUTERS

Cohen's Hedge Fund Ranks Highest by Profit  |  Bloomberg Markets magazine found that SAC Capital International, Steven A. Cohen's flagship hedge fund, was the most profitable hedge fund in the world in the first 10 months of 2012, earning $789.5 million.
BLOOMBERG MARKETS MAGAZINE

Metacapital Management Tops Ranking With 38% Return  |  The hedge fund had success by investing in mortgages, according to Bloomberg Markets.
BLOOMBERG MARKETS MAGAZINE

100 Large Hedge Funds, Ranked by Performance  | 
BLOOMBERG MARKETS MAGAZINE

I.P.O./OFFERINGS '

SeaWorld Said to Weigh Sale as Alternative to I.P.O.  |  Reuters reports: “SeaWorld Parks and Entertainment has held early talks with interested parties to explore whether a private sale could fetch more than an initial public offering, two people familiar with the matter said on Thursday.”
REUTERS

Weighing the Outcome of SeaWorld's I.P.O.  |  New investors may be hard pressed to duplicate the success that the Blackstone Group has had with the operator of theme parks, Antony Currie writes in Reuters Breakingviews.
DealBook '

VENTURE CAPITAL '

BuzzFeed Announces $20 Million in New Financing  |  BuzzFeed, the social news Web site that was one of the media industry darlings of 2012, announced on Thursday that it had raised nearly $20 million in new financing from its investors, reports Brian Stelter on the Media Decoder blog.
DealBook '

LEGAL/REGULATORY '

Former SAC Portfolio Manager Pleads Not Guilty in Insider CaseFormer SAC Portfolio Manager Pleads Not Guilty in Insider Case  |  The plea of not guilty by Mathew Martoma, a onetime SAC portfolio manager, sets the stage for a possible courtroom battle that would put the spotlight on the hedge fund and its owner, Steven A. Cohen.
DealBook '

Banks Face New Checks on Derivatives Trading  |  By New Year's Eve, 65 banks had registered their derivatives business with regulators and turned over heaps of real-time trading data to outside warehouses, fu lfilling a centerpiece of the Obama administration's financial regulatory crackdown.
DealBook '

At Recent Meeting, Fed Officials Debated Length of Stimulus  |  The New York Times reports: “Just a few months after announcing a campaign to reduce unemployment, Federal Reserve officials are already debating how soon to stop it, reflecting persistent internal divisions about the effort's value.”
NEW YORK TIMES

Geithner Said to Plan to Leave by End of Month  |  The Treasury secretary “has indicated to W hite House officials he wants to carry through with his plan to leave the administration by the end of this month, even if a deal on the debt limit isn't in place, according to two people familiar with the matter,” Bloomberg News reports, citing two unidentified people familiar with the matter.
BLOOMBERG NEWS



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