Today in the pressTuesday 01 July 2014 11.08
DELOITTE BUYS RESTRUCTURING SPECIALIST KAVANAGH FENNELL - Deloitte said that it is buying Dublin-based restructuring specialist Kavanagh Fennell. The surprise deal ends the independence of one of the country's best known and oldest restructuring and specialist forensics partnerships. Deloitte declined to say how much it paid for Kavanagh Fennell but confirmed that some money changed hands, writes the Irish Independent. The deal will help Deloitte target SMEs and large corporate clients as they restructure following the end of the financial crisis. All Kavanagh Fennell's 53 employees will join Deloitte's corporate finance department under Deloitte's corporate finance boss Martin Reilly. Mr Reilly's team will now have 150 employees. Tom Kavanagh, Ken Fennell and David Van Dessel will join Deloitte as partners and work closely with Deloitte's David Carson in the restructuring area, Deloitte said in a staterment. As well as tradiitonal insolvency and restructuring work, the acquisition will enable Deloitte to expand in the forensics area, a fast growing and increasingly important area for companies.
IRISH HOSPITAL CONSULTANTS AMONG HIGHEST PAID IN THE WORLD - Irish hospital consultants are still among the highest-paid in the world, despite the cuts imposed during the economic downturn, according to new figures from the Organisation for Economic Co-operation and Development. Ireland spends less than any other country in western Europe on health as a proportion of gross domestic product, OECD Health Statistics 2014 shows, though spending started to creep back upwards last year, writes the Irish Times. In a finding likely to be seized upon by those seeking an end to health cutbacks, the OECD says total health spending in Ireland was 8.9% of GDP in 2012, much lower than the 16.9% recorded in the US and allocations of over 11% in the Netherlands, France, Switzerland and Germany. Irish specialists earned an average €171,000 last year, higher than in any other OECD country except New Zealand and Luxembourg, according to the study. When the figures are corrected for local purchasing power, the pay of Irish specialists is the highest in the OECD apart from Luxembourg and almost twice as high as in the UK. The Department of Health said the data refers to specialists working in publicly-funded hospitals and excludes income from private practices.
LABOUR COURT BACKS SMURFIT PAY RISE - Around 150 workers at Dublin-based packaging firm Smurfit Kappa Dublin are to receive a pay increase after a Labour Court recommendation. Last January, the firm failed to provide the 2% increase to workers in spite of an agreement in place that the award would be made. The firm told the Labour Court that it was no longer in a position to pay, says the Irish Examiner. At the Labour Court hearing, Smurfit Kappa said that the withdrawal of the percentage rate increase by the company is regrettable but unavoidable given the market circumstances. The firm told the Labour Court that since the economic downturn in 2008 volumes at the plant have reduced by 18% and this was in spite of the consolidation and rationalisation of other Smurfit Kappa facilities and transfer of work to the Ballymount plant. However, unions in the dispute, SIPTU, the TEEU and UNITE pointed out that in 2009, the company withdrew from the T2016 Pay Agreement with 6% outstanding. The unions secured agreement from the members to postpone their 6% expectation in order to secure a guarantee of no pay cuts for 2011/11 and a similar proposal was agreed in 2012. When the 2013 agreement came up for negotiation the union members agreed to defer a rise on foot of a guarantee of 2% on January 1, 2014. That increase was not implemented and the dispute went to the Labour Relations Commission (LRC) before being referred to the Labour Court.
DOV CHARNEY BUILDS AMERICAN APPAREL STAKE TOWARDS 50% - Dov Charney, the controversial founder of US fashion chain American Apparel, has managed to increase his stake in the company towards 50%, according to regulatory filings in New York writes the Financial Times. After the bell on Monday, it was revealed exactly how much common stock Standard General, a privately owned hedge fund, had acquired on Mr Charney’s behalf: 25-30 million shares - or a 17% stake in the company. Combined with Mr Charney’s existing 27% stake, he now has control of 44% of American Apparel shares, edging him closer to 50% - the critical benchmark at which he can potentially push for his own reinstatement to the board. A regulatory filing last Friday outlined a deal between the hedge fund and Mr Charney in which it will acquire more than 10% of American Apparel stock, then lend money to the former chief executive to buy the shares back, which could bring him back into the boardroom if he can create a controlling bloc. Mr Charney also has the support of investor Lion Capital, who demanded the repayment of a $10m loan from the board following the attempted termination of Mr Charney’s contract, people familiar with the situation said. That could trigger another default on a $30m loan with Capital One. Those people also said Mr Charney had rallied support from a number of smaller ‘Mom-and-Pop’ sized shareholders, taking him to a position where he could call a special meeting to discuss the future of the company. The move by Mr Charney, who was forced out as chief executive, comes 48 hours after the retail group unveiled a stockholder rights plan - or poison pill - adopted to prevent any kind of hostile takeover.