Fitch cuts Sony, Panasonic debt ratings to “junk” status

TOKYO (Reuters) – Ratings agency Fitch downgraded the debt ratings of Japan’s Sony Corp and Panasonic Corp to “junk” status citing weakness in their consumer electronics and TV operations, further diminishing the luster of the once-great Japanese brands.

The cut to below investment grade, the first by a ratings firm, comes as the floundering Japanese tech giants face weak demand and fierce competition from Apple Inc and Samsung Electronics.

A strong yen and bumps in China, where growth has slowed and Japanese goods have been targeted in sometimes violent protests recently, have also weighed on their earnings.

The two companies, along with Sharp Corp, racked up combined losses of $ 20 billion last year, leading them to axe jobs, sell assets and close facilities.

“Both Sony and Panasonic are struggling to generate operating profits, but each is restructuring and I don’t envision the current situation continuing,” said Masahi Oda, Chief Investment Officer at Sumitomo Mitsui Trust Bank.

“A collapse of their core business would be a problem, but we are not at the point yet, and to me Fitch looks too negative,” Oda added.

Fitch downgraded Sony by three notches to BB-minus from BBB- minus, saying meaningful recovery will be slow. The move came after Sony, the maker of PlayStation game consoles and Vaio laptops, last week announced plans to raise 150 billion yen ($ 1.82 billion) through the sale of convertible bonds.

“Fitch believes that continuing weakness in the home entertainment and sound and mobile products and communications segments will offset the relatively stable music and pictures segments and improvement in the devices segment which makes semiconductors and components,” it said in statement.

In a separate statement, Fitch cut Panasonic to BB from BBB-minus, a two-notch downgrade, citing weakened competitiveness in its TVs and display panels as well as weak cash generation from its operations. It has a negative outlook on both the companies.

The downgrade sent Sony’s five-year credit default swaps (CDS), insurance-like contracts against debt default or restructuring, 5 basis points wider to 382.5/402.5 basis points.

Panasonic’s CDS for the same maturity were quoted at 295/315 basis points, 15 basis points wider than in Thursday morning Asian trade.

Standard & Poor’s rates the two consumer electronics makers at BBB, the second lowest of the investment grade, while Moody’s Investors Service has Baa3 on them, the lowest of the high-grade category.

With two of the three major ratings agencies still having the two companies as investment grade, institutional investors won’t face too great a pressure to cut their debt holdings in them, analysts said.

SONY SHARES TUMBLE

Sony shares shed 4.4 percent in Frankfurt on Thursday. The shares ended 1.8 percent higher at 834 yen in Tokyo before the Fitch announcement, trading not too far from their 32-year closing low of 793 yen hit on November 15. Sony stock is down 40 percent so far this year.

Panasonic shares were down 0.6 percent in Frankfurt in low volume. The stock inched up 0.7 percent to close at 407 yen in Tokyo trading, near its 34-year closing low of 385 yen reached on November 13.

Last month, Panasonic cut its forecast and warned it will lose close to $ 10 billion in the year to March, as it writes off billions of yen in tax-deferred assets and goodwill related to its mobile phone, solar panel and small lithium battery businesses.

Ahead of its earnings revision, Panasonic won $ 7.6 billion in loan commitments in October from banks including Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group, a funding backstop it says will help it avoid having to seek capital from credit markets.

Sony made a small operating profit in the July-September quarter, helped by the sale of a non-core chemicals business, and kept its forecast for a full-year profit of $ 1.63 billion.

(Additional reporting by Dominic Lau in Tokyo and Umesh Desai in Hong Kong; Editing by Muralikumar Anantharaman)

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SpongeBob Christmas special goes stop-motion

LOS ANGELES (AP) — How does “It’s a SpongeBob Christmas!” squeeze even more fun out of our porous little hero and the Bikini Bottom gang? By turning the animated characters three-dimensional for their holiday special.

In a tribute to classic fare such as “Rudolph the Red-Nosed Reindeer,” the “SpongeBob SquarePants” crew has been re-imagined as puppets and put through their comedy paces for stop-motion photography.

The story line as dreamed up by Tom Kenny, the voice of SpongeBob, and his musical collaborator Andy Paley: The denizens of Bikini Bottom are suddenly rude because of exposure to jerktonium, a plot by naughty Plankton to get on Santa’s (voiced by guest star John Goodman) nice list.

Plankton “wants to put everyone on their worst behavior when they should be on their best behavior, and zany mayhem ensues,” Kenny said.

“It’s a SpongeBob Christmas!” debuts 9:30 p.m. EST Friday on CBS, followed by an encore on the show’s home network, Nickelodeon, at 7:30 p.m. EST Sunday, Dec. 9.

The first-time foray into stop-motion is a welcome change for the 13-year-old “SpongeBob,” Kenny said.

“It’s fun that after all these years we can still do stuff that’s a little different. It’s like reinventing the wheel a little bit — if you can refer to a square character as a wheel,” he added, unable to resist the quip.

The actor looks back fondly on childhood memories of “Rudolph” from the Rankin-Bass studio and other stop-action projects. Even the TV commercial that put Santa on an electric razor subbing for a sleigh gets a Kenny shoutout.

Asked if young viewers might be fazed by seeing the familiar characters in a new guise, Kenny mulled the question before rebutting it.

“The characters act the same, the recording process is exactly the same. Our job is exactly the same. … There’s still plenty of the animated mayhem and anarchy that happens in the 2-D version of the show.”

Screen Novelties, the Los Angeles studio that produced the Christmas special, made a feast out of the job. In just one of their inventive approaches, filmmakers used fruit-flavored cereal to create a coral reef.

“I came to the studio and they had hundreds of boxes of cereal open and were hot-gluing it together,” Kenny recalled.

The Patrick Star puppet was covered in wool-like material and SpongeBob “wasn’t a sponge but some kind of weird material they found somewhere,” he said. “They’re like ‘MacGyver,’ always repurposing something.”

The TV special has a small element of recycling. Kenny calls it a testament to “a goofy little song” he and Paley wrote three years ago — “Don’t Be a Jerk, (It’s Christmas).”

“Bring joy to the world, it’s the thing to do. But the world does not revolve around you. Don’t be a jerk, it’s Christmas” is among its bouncy yet cautionary verses.

The tune is among a dozen included on the digital release “It’s a SpongeBob Christmas! Album,” most written by Kenny and Paley (a songwriter-producer who’s worked with artists including Brian Wilson and Blondie). Four songs are part of the special.

Music fans might want to check out the album for its craftsmanship. The veterans who play on it include harpist Corky Hale and harmonica player Tommy Morgan, both of whom have backed a roster of big stars, including Billie Holliday and Frank Sinatra.

The recording sessions proved an early holiday gift for Kenny.

“We’d spend a half-hour working and then make the musicians tell stories about who they played with,” he said.

___

Online:

http://spongebob.nick.com/

http://www.cbs.com/

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Recipes for Health: Apple Pear Strudel — Recipes for Health

Andrew Scrivani for The New York Times

This strudel is made with phyllo dough. When I tested it the first time, I found that I had enough filling for two strudels. Rather than cut the amount of filling, I increased the number of strudels to 2, as this is a dessert you can assemble and keep, unbaked, in the freezer.

Filling for 2 strudels:

1/2 pound mixed dried fruit, like raisins, currants, chopped dried figs, chopped dried apricots, dried cranberries

1 1/2 pounds apples (3 large) (I recommend Braeburns), peeled, cored and cut in 1/2-inch dice

1 tablespoon fresh lemon juice

2 tablespoons unsalted butter for cooking the apples

1/4 cup (50 grams) brown sugar

1 teaspoon vanilla

1 teaspoon cinnamon

1/2 teaspoon freshly grated nutmeg

1/4 cup (30 grams) chopped or slivered almonds

3/4 pound (1 large or 2 small) ripe but firm pears, peeled, cored and cut in 1/2-inch dice

For each strudel:

8 sheets phyllo dough

7/8 cup (100 grams) almond powder, divided

1 1/2 ounces butter, melted, for brushing the phyllo

1. Preheat the oven to 375 degrees. Line 2 sheet pans with parchment.

2. Place the dried fruit in a bowl and pour on hot or boiling water to cover. Let sit 5 minutes, and drain. Toss the apples with the lemon juice.

3. Heat a large, heavy frying pan over high heat and add 2 tablespoons butter. Wait until it becomes light brown and carefully add the apples and the sugar. Do not add the apples until the pan and the butter are hot enough, or they won’t sear properly and retain their juice. But be careful when you add them so that the hot butter doesn’t splatter. When the apples are brown on one side, add the vanilla, cinnamon, nutmeg and almonds, flip the apples and continue to sauté until golden brown, about 5 to 7 minutes. Stir in the pears and dried fruit, then scrape out onto one of the lined sheet pans and allow to cool completely. Divide into two equal portions (easiest to do this if you weigh it).

4. Place 8 sheets of phyllo dough on your work surface. Cover with a dish towel and place another, damp dish towel on top of the first towel. Place a sheet of parchment on your work surface horizontally, with the long edge close to you. Lay a sheet of phyllo dough on the parchment. Brush lightly with butter and top with the next sheet. Continue to layer all eight sheets, brushing each one with butter before topping with the next one.

5. Brush the top sheet of phyllo dough with butter. Sprinkle on half of the almond powder (50 grams). With the other half, create a line 3 inches from the base of the dough, leaving a 2 1/2-inch margin on the sides. Top this line with one portion of the fruit mixture. Fold the bottom edge of the phyllo up over the filling, then fold the ends over and roll up like a burrito. Using the parchment paper to help you, lift the strudel and place it on the other parchment-lined baking sheet. Brush with butter and make 3 or 4 slits on the diagonal along the length of the strudel. Repeat with the other sheets of phyllo to make a second strudel. If you are freezing one of them, double-wrap tightly in plastic.

6. Place the strudel in the oven and bake 20 minutes. Remove from the oven, brush again with butter, rotate the pan and return to the oven. Continue to bake for another 20 to 25 minutes, or until golden brown. Remove from the heat and allow to cool for at least 15 minutes. Serve warm or room temperature.

Yield: 2 strudels, each serving 8

Advance preparation: The fruit filling will keep for a couple of days in the refrigerator. The strudel can be baked a few hours before serving it. Recrisp in a medium oven for 10 minutes. It can also be frozen before baking, double-wrapped in plastic. Transfer directly from the freezer to the oven and add 10 minutes to the baking time.

Nutritional information per serving: 259 calories; 13 grams fat; 4 grams saturated fat; 3 grams polyunsaturated fat; 5 grams monounsaturated fat; 15 milligrams cholesterol; 34 grams carbohydrates; 4 grams dietary fiber; 91 milligrams sodium; 4 grams protein

Martha Rose Shulman is the author of “The Very Best of Recipes for Health.”

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Judge to let Hostess liquidation proceed

Hostess Brands Inc. on Wednesday won permission from a U.S. bankruptcy judge to begin shutting down, and expressed optimism it will find new homes for many of its iconic brands, which include Twinkies, Drake's cakes and Wonder Bread.

U.S. Bankruptcy Judge Robert Drain in White Plains, New York authorized management, led by restructuring specialist Gregory Rayburn, to immediately begin efforts to wind down the 82-year-old company, a process expected to take one year.

"It appears clear to me that the debtors have taken the right course in seeking to implement the wind-down plan as promptly as possible," Drain said near the end of a four-hour hearing.

The judge authorized Hostess to begin the liquidation process one day after his last-ditch mediation effort between the Irving, Texas-based company and its striking bakers' union broke down.

Roughly 15,000 workers were expected to lose their jobs immediately, and most of the remaining 3,200 would be let go within four months.

"This is a tragedy, and we're well aware of it," Heather Lennox, a lawyer for Hostess, told the judge. "We are trying to be as sensitive as we can possibly be under the circumstances to the human cost of this."

Lennox said Hostess has received a "flood of inquiries" from potential buyers for several brands that could be sold at auction, and expects initial bidders within a few weeks.

Joshua Scherer, a partner at Perella Weinberg Partners, which is advising Hostess, said the company was in "active dialogue" over its Drake's brand with one "very interested" party that had toured a New Jersey plant on Tuesday.

He said that regional bakeries, national rivals, private equity firms and others have also expressed interest in various brands and that more than 50 nondisclosure agreements have been signed.

"These are iconic brands that people love," Scherer said.

While prospective buyers were not identified at the hearing, bankers have said rivals including Flowers Foods Inc. and Mexico's Grupo Bimbo SAB de CV were likely to be interested in some of the brands.

Representatives of neither company responded on Wednesday to requests for comment.

Scherer said Hostess could be worth $2.3 billion to $2.4 billion in a normal bankruptcy, an amount equal to its annual revenue. It also has about $900 million of secured debt and faces up to about $150 million of administrative claims.

Scherer expects a discount in this case because plants have already been closed and Hostess' value could fall further if the liquidation were dragged out.

"I've had buyers tell me, 'Josh, the longer it takes, the less value I'm going to be able to pay you,' " he said.

Hostess decided to liquidate on Nov. 16, saying it was losing about $1 million per day after the Bakery, Confectionery, Tobacco and Grain Millers Union, representing close to one-third of its workers, went on strike a week earlier.

The bakers union walked out after Drain authorized Hostess to impose pay and benefit cuts, which the International Brotherhood of Teamsters, Hostess' largest union, had accepted.

Hostess has about 33 plants, plus three it decided to close after the strike began, as well as 565 distribution centers and 570 bakery outlet stores.

Many of the 3,200 workers expected to stay on will help shut these properties and prepare them for sale. Hostess expects to need only about 200 employees by late March.

Rayburn, a former chief restructuring officer for the bankrupt phone company WorldCom Inc., said that letting 15,000 workers go now helps preserve their ability to obtain unemployment benefits.

"I need to maximize the value of the estate, but I need to do the best I can for my employees," he said.

Hostess filed for Chapter 11 protection on Jan. 11, its second bankruptcy filing in less than three years.

The case is In re: Hostess Brands Inc. et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-22052.

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'It's going to be an absolutely awful morning': forecaster

Dense fog caused nearly 200 flights to be canceled and more than 500 others to be delayed at O'Hare and Midway airports this morning, tying up plans of holiday travelers.

As of 9:15 a.m., 158 flights had been canceled at O'Hare International Airport and 25 at Midway Airport, according to flightstats.com, which draws on data from airports and the Federal Aviation Administration. More than 300 flights were reporting delays at O'Hare and more than 200 at Midway.

“Both (airports) are reporting visibility near zero,” Gino Izzi, a meteorologist at the National Weather Service, said at 6 a.m. today.  “It’s going to be an absolutely awful morning, and will probably go into the afternoon at most airports.”

Lines were slow but moving at O'Hare this morning.

“Right now it’s OK, right now it’s not too crowded, but I bet later on this afternoon or whatever it will be a lot more crowded,” said Casey Tristano, who was waiting for a flight out of O'Hare.

The Chicago Department of Aviation says it expects 1.8 million passengers to move through the two airports in the week between Nov. 20 and Nov. 27. Sunday is expected to be the busiest day, when O'Hare alone could see more than a quarter million travelers.

Chicago and state police were reporting no serious accidents this morning, though longer-than-usual delays were being reported on expressways.

“I think the fog is going to have some effect on either people's decisions on when they’re going to leave or certainly, if they're out, in getting to where they want to go today," said Beth Mosher, spokeswoman for the AAA Motor Club.

 “You know here in Illinois, we’re going to see about 2 million people take to the roads and almost 40 million people take to the roads nationwide," she said. "Fog certainly is going to have an affect, and all those people on the roads at the same time, getting to where they want to go.”

A dense fog advisory is in effect for northern and central Illinois. The advisory is also in effect for most of Missouri and Wisconsin, as well as eastern Iowa and northwest Indiana.

“If it does improve, it probably won’t be fast,” Izzi said. “We’ll probably be sitting in the pea soup through most of the morning hours. It probably won’t be something where it’s going to be dense fog at 10 a.m. and sunny at 11 a.m.”

The fog is blanketing the area as temperatures headed toward 60 today. Izzi said temperatures on Thanksgiving should reach well into the 60s.

WGN-TV contributed

chicagobreaking@tribune.com
Twitter: @chicagobreaking

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NJ jury convicts NY man in iPad data breach case

NEWARK, N.J. (AP) — A federal jury on Tuesday convicted a man of illegally gaining access to AT&T‘s servers and stealing more than 120,000 email addresses of iPad users including New York Mayor Michael Bloomberg and film mogul Harvey Weinstein.

Andrew Auernheimer, of New York, was convicted of identity theft and conspiracy to gain unauthorized access to computers. Each count carries a maximum prison sentence of five years.

Prosecutors said the former Fayetteville, Ark., resident was part of an online group that tricked AT&T’s website into divulging email addresses including those of Bloomberg, Weinstein, then-White House chief of staff Rahm Emanuel, who’s now Chicago’s mayor, and other celebrities.

The group then shared the addresses with the website Gawker, which published them in redacted form accompanying a news article about the breach, prosecutors said.

A second man arrested with Auernheimer early last year, Daniel Spitler, of San Francisco, pleaded guilty that June.

At the time of the arrests, U.S. Attorney Paul Fishman said there was no evidence the men used the swiped information for criminal purposes. But authorities cautioned that it could have wound up in the hands of spammers and scam artists.

According to court papers, the men used a computer script they called the iPad3G Account Slurper to fool AT&T’s servers into thinking they were communicating with an iPad. The theft of the email addresses occurred in June 2010.

Prosecutors said at the time of Auernheimer’s arrest that he had bragged about the operation in a blog posting and in an interview with CNET published online after the Gawker article. Court papers also quoted him declaring in a New York Times article: “I hack, I ruin, I make piles of money. I make people afraid for their lives.”

Auernheimer, after he was charged and released on bail, had declined to comment.

iPad maker Apple Inc., based in Cupertino, Calif., referred questions to AT&T, which acknowledged a security weak spot on a website that exposed the email addresses. AT&T said the vulnerability affected only iPad users who signed up for its 3G wireless Internet service and said it had fixed the problem.

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Academy Sues Over “Deer Hunter” Oscar Statuette

LOS ANGELES (TheWrap.com) – A possibly counterfeit Oscars trophy for the 1978 film has sparked a very real lawsuit.

The Academy of Motion Picture Arts and Sciences has filed suit in U.S. District Court in Washington state over an Oscar statuette that “was either a genuine statuette or a very convincing counterfeit.”

If it’s real, the trophy was the one awarded to Aaron Rochin for his sound work on the 1978 film “The Deer Hunter.”

The Academy is suing Washington resident James Dunne, who sold the statue, and Edgard G. Francisco, who purchased it.

Dunne initially offered the statuette for sale on eBay in September but deleted the listing for fear that the Academy might discover it, according to the suit, which was filed last week. He later privately sold the statue of Florida resident Francisco for $ 25,000, the suit says.

The suit goes on to allege that after an appraisal, Francisco decided the statuette was fake and demanded a $ 15,000 refund. Dunne claims he provided a full refund. He also claims that he told Francisco that the trophy might not be authentic before he bought it.

Dunne told the Academy that he had either picked up the statuette at a moving sale or obtained it from a third party who got it at an estate sale.

After getting the refund, the suit says, Francisco threw the statuette away.

The Academy’s suit is two-fold: If the trophy was real, the Academy is seeking restitution for the loss of its property; if it was fake, the Academy claims that the pair infringed on the organization’s Oscars copyright.

The latter would seem to be the more probable scenario in this case. For one thing, the Academy says that the identification number for the statuette would place its manufacture in 1979, while the eBay auction billed it as a “Rare Pre-1950 Academy of Motion Picture Arts and Sciences OSCAR Statue Award!”

The Academy is asking for unspecified damages, plus suit costs and attorneys’ fees.

(Pamela Chelin contributed to this report)

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Well’s Vegetarian Thanksgiving 2012

Every fall, Well goes vegetarian for Thanksgiving, taking the meaty bird off the table to make room for a spectacular array of vegetarian soups, sides, main courses, salads and desserts. So get ready to save a turkey and savor the flavors of the fall harvest.
Every day until Thanksgiving, we will add more vegetarian recipes for your holiday table. Click on a photo to learn more about each recipe.

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Hostess, union fail to reach deal

Hostess Brands Inc, the bankrupt maker of Twinkies and Wonder Bread, said on Tuesday that it failed to reach a deal in mediation with the Bakery, Confectionary, Tobacco and Grain Millers Union.

The company, which operates three facilities in Illinois, including in Schiller Park and Hodgkins, said it will have no further comment until a hearing scheduled for Wednesday before the U.S. Bankruptcy Court for the Southern District of New York.

A representative of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) did not immediately respond for comment.

The ailing company, which also makes Wonder Bread and Drake's cakes, went to bankruptcy court on Monday to seek permission to liquidate its business, claiming that its operations were crippled by the bakers' strike and that winding down was the best way to preserve its dwindling cash.

But Bankruptcy Judge Robert Drain of the Southern District of New York urged the sides into a private mediation, prompted by a desire to protect the more than 18,000 jobs at stake.

The 82-year-old Hostess runs 33 bakeries, 553 distribution centers, about 5,500 delivery routes and 527 bakery outlet stores throughout the United States. Bakery operations ceased last week, though product deliveries to stores continued in order to sell already-made products.

The company has blamed union wages and pension costs for contributing to its unprofitably. Hostess Chief Executive Gregory Rayburn has also said the company's labor contracts have deterred would-be bidders for the company and its assets.

Aside from its unionized workforce, analysts, bankers and restructuring experts have said that a fleet of inefficient and out-of-date factories has also eaten up costs. They have said the brand names were likely to be more valuable once they were separated from the factories and sold to non-union competitors.

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Deadly Indiana home explosion investigated as homicide

The house explosion that killed two people and destroyed several homes in an Indianapolis neighborhood is now being investigated as a homicide, authorities said, though no suspects have been named.

Indianapolis Homeland Security Director Gary Coons announced the criminal investigation Monday evening, shortly after a funeral was held for the husband and wife who had lived next door to the house where investigators believe the blast occurred.

"We are turning this into a criminal homicide investigation," Coons said after meeting with residents, the first public acknowledgement by investigators of a possible criminal element to the Nov. 10 explosion.

Search warrants have been executed and officials are now looking for a white van that was seen in the subdivision on the day of the blast, Marion County Prosecutor Terry Curry said. Federal authorities are offering a $10,000 reward for information in the case.

Curry said the investigation is aimed at "determining if there are individuals who may be responsible for this explosion and fire," but neither he nor Coons took questions or indicated if investigators had any suspects. No arrests have been made.

A lawyer representing Monserrate Shirley and Mark Leonard, who lived in that home that is believed to have exploded, said Tuesday that the couple was bewildered by the new direction of the investigation.

Randall Cable said in a statement that Shirley and Leonard have "cooperated fully" with investigators and that they want the cause "of this horrific and saddening tragedy to be determined."

Officials say they believe natural gas was involved in the explosion, which destroyed five homes and left dozens damaged. Investigators have focused on appliances in their search for a cause. The explosion caused an estimated $4.4 million in damage.

"We thought something like this was not just an accident," said Doug Aldridge, who heads the neighborhood Crime Watch.

Aldridge said he and other residents frequently saw a white van parked outside the home, though he didn't know who owned it. He said residents are angry and upset but that he expects most of them to stay in the neighborhood.

Hundreds of people attended the funeral Monday for John Dion Longworth, 34, and his 36-year-old wife Jennifer Longworth.

She was a second-grade teacher remembered for knitting gifts for her students, while her husband, an electronics expert, was known as a gardener and nature lover. The school where Jennifer Longworth taught was closed Monday so teachers and students could attend the funeral.

Indianapolis Mayor Greg Ballard told reporters after attending the Longworths' funeral Monday that he had been having a hard time coming to terms with what happened.

"There is a search for truth and there is a search for justice," Ballard said.

John Shirley, who co-owns the house with his ex-wife, Monserrate, has told The Associated Press that he had recently received a text message from his 12-year-old daughter saying the furnace in the home had gone out.

Monserrate Shirley said Leonard had replaced the thermostat and that the furnace was working. Cable has said the daughter told her mother she had smelled an odd odor in recent weeks, but they hadn't reported it.

Shirley and Leonard were away at a casino at the time of the blast, Cable said. The daughter was staying with a friend, and the family's cat was being boarded.

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