Business News at a Glance
Posted May 11, 2018 10:35 p.m. EDT
AT&T Chief Says Hiring Lawyer Tied to Trump ‘Was a Big Mistake’
Randall L. Stephenson, AT&T’s chief executive, said Friday the company had made a “big mistake” by hiring President Donald Trump’s personal lawyer, Michael Cohen, to provide advice on federal policy, including how the government might approach its deal to buy Time Warner. Stephenson also said the company’s head of lobbying and external affairs, Bob Quinn, would be leaving the company. "Our company has been in the headlines for all the wrong reasons these last few days and our reputation has been damaged,” Stephenson wrote in a memo to employees. Stephenson’s note followed the revelation this week that the company had paid Cohen $600,000.
At Toys R Us, Bankruptcy Was Painful, But Not for All
Last spring, Toys R Us, struggling in the face of competition, wanted to refinance about $200 million in debt. A year and a messy bankruptcy later, Toys R Us is expected to pay as much as $348 million for the dozens of bankers, lawyers and consultants that tried to fix its problems. The giant payout, detailed in company documents released Friday, shows how lucrative corporate bankruptcies can be for professionals, while leaving many workers and creditors with scraps. Toys R Us’ swift downfall has been particularly painful for the company’s more than 30,000 employees. The store workers say they will not receive severance.
Trump, Softening His Tone, Calls for More Talks on Car Emissions
President Donald Trump on Friday directed his administration to negotiate with California over a proposed rollback of fuel economy and tailpipe emissions standards, a move that could avert a damaging court battle with the potential to sow chaos in the auto industry. California has vowed to stick to its own stricter emissions standards. Nonetheless, the state must be invited to the negotiating table as the administration moves forward with its plan to relax the fuel economy rules, Trump said at a White House meeting between top administration officials and major auto executives, according to three people briefed on the discussions.
Industry Lawyer Expected to Head FTC Consumer Protection
The Federal Trade Commission is expected to appoint an industry lawyer who has represented Facebook, Uber and Equifax to lead the agency’s consumer protection bureau tasked with policing those companies. The lawyer, Andrew M. Smith, would recuse himself from any potential investigations or enforcement involving dozens of companies he has worked for over the past two years while at Covington & Burling in Washington, including many banks, lenders, credit-reporting agencies and technology companies, according to two people familiar with his proposed appointment but were not authorized to speak publicly. Those recusals would force Smith to step aside from his bureau’s most prominent investigations.
Colleges Hire Consultants to Help Manipulate Student Loan Default Rates
Colleges and universities are avoiding federal punishment for high student-loan default rates by hiring consultants who encourage borrowers to delay payments on their loans, Congress’ nonpartisan watchdog found. In a two-year examination, the Government Accountability Office found that student borrowers were pressured to put their loans “in forbearance” — an option that allows borrowers to avoid default. It also allows colleges and universities to avoid losing federal funding because of excessive defaults. The cohort default rate, which accounts for borrowers who default on their loans within three years of graduating, is the only metric in the federal higher education law that quantifies whether colleges are graduating students who can pay back their debts.