DealBook Briefing: A Modest Proposal on Remington for Gun Control Advocates

• Any settlements won’t limit what people can say about their experience.

“Our message to the world is that we need to turn the lights on,” Tony West, Uber’s chief legal officer, wrote in a blog post.


Les Moonves, CBS’s C.E.O.

Drew Angerer/Getty Images

What CBS’s declaration of war against Shari Redstone means

In suing Ms. Redstone to preserve the independence of his board, Les Moonves may have put his job as CBS’s C.E.O. on the line. If the lawsuit fails, Ms. Redstone could replace directors and installing a new chieftain. (Whether she would is another matter.)

CBS believes it can win in Delaware’s Court of Chancery, and that it has a good chance of ultimately issuing a special dividend that would dilute the Redstones’ voting stake from 79 percent to 17 percent. Ms. Redstone is equally sure that the courts won’t let that happen to a controlling shareholder with clear rights.

The context: CBS and Viacom had been making progress in merger negotiations. But they were still far apart on management of the combined company.

Of note: One of the plaintiffs in CBS’s lawsuit is Martha Minow, the former Harvard Law School dean whom Ms. Redstone placed on the board last year.

Critics’ corner: It’s a clash of egos, says Jennifer Saba of Breakingviews. Investors have reason to celebrate (unless the company’s gambit fails), argues Elizabeth Winkler of Heard on the Street. Mr. Moonves might be making a huge mistake, writes Tara Lachapelle of Bloomberg Opinion.

Elsewhere in deals: Fujifilm won’t sweeten its bid for Xerox; here’s how Carl Icahn beat it. Sears is exploring a potential sale of assets. Two Canadian medical marijuana companies agreed a $2.5 billion merger.

The political flyaround

• Moguls like Paul Singer of Elliott Management and Ken Griffin of Citadel have reportedly cut donations to Republicans because of the tax overhaul treats hedge funds. (CNN)

• How Michael Cohen shed light on the “shadow lobbying” industry. (FT)

• The Trump administration defended its revised plans to lower drug prices, which critics say would have little effect. (NYT)

• Ben Bernanke and Stanley Fischer are among the Fed alumni who support appointing Richard Clarida as No. 2 there. Another Fed nominee, Michelle Bowman, plans to criticize postcrisis banking regulations at her Senate confirmation hearing.

• Senators led by Susan Collins of Maine introduced a bill to halt tariffs on Canadian paper imports. (Bloomberg)

• The White House and the E.P.A. blocked publication of a study on the effects of water contamination. The E.P.A.’s internal watchdog said that Scott Pruitt demanded a 24-hour security detail from Day 1.


Joe Raedle/Getty Images

ZTE shows Trump’s swing away from trade hard-liners

Now we know why President Trump offered to save the Chinese telecom company: to convince China to lift restrictions on U.S. agricultural exports. That’s counter to the approach favored by the likes of Peter Navarro, a trade adviser, and the U.S. trade representative, Bob Lighthizer.

It also reportedly reflects a loss of influence for Commerce Secretary Wilbur Ross, whose department Mr. Trump directed to explore alternatives to ZTE sanctions.

Other potential winners from the move: Qualcomm, whose takeover of NXP Semiconductors will be reviewed again by Chinese regulators, and JPMorgan Chase, which hopes to expand in China.

Elsewhere in trade: Senators dropped a plan for national security reviews of outbound investments by U.S. companies.


The sports book at the South Point hotel and casino in Las Vegas.

John Locher/Associated Press

What’s next for sports gambling

After the Supreme Court legalized a line of business already estimated to bring in $150 billion of bets each year, a swath of industries is figuring out how to cash in.

Tom Rogers, the chairman of the mobile sports betting start-up WinView (and former TiVo C.E.O.), told Michael that broadcasters like ESPN could use online betting to bolster falling ratings:

Those players are the ones hurting and are dealing with declining metrics. This provides a possible opportunity. We’ll be talking with them.

Other potential winners: Sports leagues. States like New Jersey. And DraftKings and FanDuel, obviously. (Buy Lex recommends shorting the mafia.)


Richard Drew/Associated Press

Interpreting the Goldman trading shake-up

At the Wall Street giant’s fabled securities division, two of the three top executives, Pablo Salame and Isabelle Ealet, are preparing to retire. It’s a sign of how the operation has struggled — and how the bank’s power center continues to tilt away from trading.

Sarah Butcher of eFinancialcareers had a more acerbic take:

For a firm which likes to clear out its bottom 5 percent of performers annually, Goldman seemed strangely wedded to its underperforming senior partners.

Elsewhere in finance: Hedge fund moguls like Dan Loeb love the Robin Hood Foundation, but it has backed nonprofits that have protested their industry. The former head of JPMorgan Chase’s blockchain team, Amber Baldet, has unveiled a blockchain start-up, Clovyr.


Protesters in Seattle campaigning for a business tax that Amazon opposed.

Gregory Scruggs/Reuters

The tech flyaround

• Under pressure from Amazon, Seattle scaled back its forthcoming tax on big businesses. Under pressure from employees, the company agreed to a rule to improve its board’s diversity. It’s also testing an advertising tool to challenge Google.

• WhatsApp is playing a central role in India’s elections. (NYT)

• After Cambridge Analytica and Europe’s new privacy rules, some advertisers are questioning Facebook’s value to them. And the company’s investigation into data privacy abuses has blocked some 200 apps.

• Tesla reportedly rejected a plan to give its Autopilot feature sensors to check drivers were paying attention. The company said it would “flatten” its management structure.

• New Enterprise Associates is reportedly planning to sell roughly $1 billion worth of stakes in start-ups to a new venture firm it would create. (WSJ)


Bill O’Reilly

Andy Kropa/Invision, via Associated Press

Revolving door

Bill O’Reilly is reportedly in advanced talks to return to TV — at Newsmax. (Page Six)

Vittorio Colao, Vodafone’s C.E.O. for a decade, plans to step down in October, after engineering its $22 billion Liberty Global deal. (Bloomberg)

Ted Eliopoulos, chief investment officer of the Calpers public pension fund and the architect of its move away from hedge funds, plans to retire at year end to move to New York for family reasons. (Institutional Investor)

• Two directors at Wynn Resorts, John Hagenbuch and Robert Miller, have resigned. (Bloomberg)

The speed read

• A U.S. federal judge looks likely to award the Justice Department a $250 million yacht. It’s owned by Low Taek Jho, a Malaysian financier caught up in the 1MDB scandal. (Bloomberg)

• The best-paid C.E.O.s don’t necessarily run the best-performing companies. (WSJ)

• Can robots help both employers and employees? In some industries, probably yes. (WSJ)

• Royal Dutch Shell’s takeover of an English energy start-up shows how oil giants are remaking themselves. (NYT)

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Art Collector and Bon Vivant Dies in Trump Tower Home He Couldn’t Sell

“We send our prayers and deepest condolences to Mr. Brassner’s family and loved ones,” a spokeswoman for the Trump Organization said on Sunday.

Mr. Brassner’s apartment in Trump Tower, built in 1983, did not have sprinklers, which were not required. In 1999, after two deadly fires in high-rise apartments, New York City enacted legislation requiring sprinkler systems in most new residential buildings and existing properties that were extensively renovated.

Real estate developers, including Mr. Trump, fought the sprinklers, arguing that they were unnecessary and would add $4 per square foot to the cost of an apartment.

James Long, a spokesman for the Fire Department, said on Sunday that residents in a fireproof building, like Trump Tower, were safest inside their apartments rather than evacuating.


Todd Brassner in an undated photograph that was posted on his Facebook page.

via Facebook

Damage from the fire was visible from Madison Avenue and 56th Street. Fifty floors up, facing east, a pair of large horizontal windows were punched out, and the glass and metal facade above appeared scorched and sooty. A metal work platform lowered from the roof hung beside the gutted apartment.

For Mr. Brassner, the building was a prestigious address for dealing art, and his early years there echoed his successes in the nexus of the art and music worlds.

“He led a very out-there life,” said Jodi Stuart, who was Mr. Brassner’s first girlfriend and had been in and out of his life since. “Out there in sports cars, out there in rock ’n’ roll, playing Hendrix on guitar, bigger than life.”

For much of Mr. Brassner’s life, she said, “You never saw him without his Jaguar.”

“We used to go to the Fillmore East and Max’s Kansas City,” Ms. Stuart said. “Todd got right in with the Factory and Andy Warhol. He picked em: Jimi Hendrix, Andy Warhol, Jaguars, beautiful homes, beautiful women.”

Mr. Brassner was one of two sons born to an art dealer and lighting manufacturer named Jules Brassner, who introduced him to Warhol. Todd Brassner fit right into the Warhol orbit, and often went shopping with the artist, said Stuart Pivar, a collector who was very close to Warhol.

“They were like two 14-year-olds, seeing the world,” Mr. Pivar said. “And he was very knowledgeable about pop art.”

Though Mr. Brassner enjoyed the high life, “he was a very family-oriented guy, and we often talked about our parents,” said Howard Murray, a television director who grew up with Mr. Brassner and reconnected about a decade ago. “He always talked about his mom talking Yiddish.”

But in recent years, Mr. Brassner started leaving the apartment less and less frequently, and he resisted offers from friends to visit or bring food. Blake Gopnik, who wanted to interview Mr. Brassner for a biography of Warhol, said he set up a number of meetings. “But he always made some complicated excuse,” Mr. Gopnik said.

Mr. Brassner’s struggle with drugs brought him into contact with “shady characters, who snookered him out of masterpieces,” Mr. Pivar said. The apartment was so cluttered Mr. Brassner could barely move, Mr. Pivar said.

He filed for bankruptcy in 2015, but soon after he inherited money from his father. “He showed up at my house the next day in a brand-new red Lamborghini,” Mr. Pivar said. “That was Todd.”

Ms. Stuart said she thought Mr. Brassner did not want his friends to see him in declining health.

“We tried very hard to meet with him or have lunch or dinner with him,” she said. “He wanted us to know the Todd that was before. Not the Todd who was impaired. He suffered a lot.”

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Elon Musk Makes Light of Tesla’s Troubles in April Fool’s Tweets


Elon Musk joked that Tesla was “Bankwupt!” in an April Fool’s Twitter post that made light of the company’s worrying financial picture.

Mark Brake/Getty Images

For the past week, as the electric-car maker Tesla has been buffeted by a barrage of negative news, Elon Musk, its chief executive, has offered no public comments on the company’s shaky finances, its slumping stock price or the increasing questions about the safety of its self-driving technology.

He finally responded Sunday — with an April Fool’s joke that the company was going bankrupt.

“Despite intense efforts to raise money, including a last-ditch mass sale of Easter Eggs, we are sad to report that Tesla has gone completely and totally bankrupt,” Mr. Musk wrote on Twitter. “So bankrupt, you can’t believe it.”

A follow-up tweet said, “Elon was found passed out against a Tesla Model 3, surrounded by ‘Teslaquilla’ bottles, the tracks of dried tears still visible on his cheeks.” It was accompanied by a photo of Mr. Musk, with his eyes closed, seemingly pretending to be unconscious, partially covered by part of a box with “Bankwupt!” written in black marker.

That tweet added, “This is not a forward-looking statement, because, obviously, what’s the point? Happy New Month!”

The lighthearted tone of the tweets contrasted with recent analyst reports that warned of serious financial strains on the company as it struggles to ramp up production of the Model 3, a compact car Mr. Musk is counting on to generate revenue.

Last week, Moody’s Investors Service downgraded Tesla’s credit rating and said Tesla risked running short of cash by the end of the year. Tesla shares have lost nearly a quarter of their value since March 12.

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Grocery Wars Turn Small Chains Into Battlefield Casualties

Amazon’s $13 billion purchase of Whole Foods in June added a sense of urgency, raising the prospect that the e-commerce giant would find a way to upend groceries just as it has every other aspect of retail. This month, Walmart responded with its own plan to start offering an online grocery delivery service in 100 cities.


Abel Porter, the chief executive of Fairway, addressing employees this month in New York. “It’s not a level playing field,” he said in an interview. “Competing against Amazon is like competing against the government or a military commissary.”

Andrew Seng for The New York Times

These digital initiatives — and aggressive price cuts and expansion by other deep-pocketed retailers like the German entry Lidl — are weeding out the weakest links.

“There is a tremendous shakeout in food retail right now,” said Burt P. Flickinger III, a managing director of the retail consulting firm Strategic Resource Group, whose family founded a grocery business more than a century ago.

At stake is not only the price of toothpaste and bananas, but the fate of thousands of cashiers, cake decorators and meat cutters, many of whom belong to labor unions and are owed pensions when they retire. Tops employs more than 12,000 unionized employees at about 160 stores in New York, Pennsylvania and Vermont.

Maribeth Druse made a lifelong career in groceries, but given the industry’s struggles, her experience will increasingly be harder to replicate.

Ms. Druse, 61, was still in high school when she started working in the meat department of a grocery chain that Tops eventually acquired. She now collects a $20,000-a year-pension and is still able to work part time at the Tops in Cooperstown, N.Y.

“Who works in the same job for 44 years and gets a pension anymore?” Ms. Druse asked. “Nobody.”


Employees of Fairway, which went bankrupt in 2016, heard Mr. Porter tell them, “I am here to announce that Fairway has bounced back.”

Andrew Seng for The New York Times

Like businesses in other industries — including Toys “R” Us, which announced liquidation plans this month — many failing supermarkets are owned by private equity firms that have loaded the companies up with debt. That hampers their ability to compete in an environment where prices in some markets have dropped by as much as 25 percent, Mr. Flickinger said.

Tops was long challenged by the debt its former private equity backer, Morgan Stanley Investment Management, heaped on it.

The private equity firm Lone Star has cashed out $980 million in dividends from Winn-Dixie’s parent company since 2011, according to Moody’s Investors Service. Most of the payments were made by taking out debt on the chain, leaving less money to invest in stores.

Marsh Supermarkets, an Indianapolis regional grocer that had been backed by private equity, laid off more than 1,500 workers and required a federal takeover of its pension plan last year.

And Fairway, the iconic New York grocer that Blackstone took ownership of after it went bankrupt in 2016, is still trying to distinguish itself in a crowded field, but reports making some progress on its turnaround.

This month, Fairway executives met with the company’s roughly 3,500 workers, most of whom are unionized, to unveil a set of new initiatives — like investments in a new marketing campaign. It plans to emphasize the company’s role in bringing new foods to market, as it did with Chobani yogurt and Cape Cod potato chips.

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Remington, Centuries-Old Gun Maker, Files for Bankruptcy as Sales Slow


Remington, the American gun manufacturer, filed for Chapter 11 bankruptcy protection on Sunday. The move was expected amid the company’s mounting debt and declining sales.

Lance Murphey for The New York Times

Remington Outdoor, one of the oldest firearm manufacturers in the United States, filed for bankruptcy protection on Sunday amid mounting debt and declining sales.

Remington had said last month it was nearing a bankruptcy filing, which it made on Sunday in federal bankruptcy court in Delaware. In its Chapter 11 filing, the gun maker said it had between $100 million and $500 million in debt and would continue to operate while under bankruptcy protection. It estimated that its assets were between $100 million and $500 million.

Remington, which was founded in upstate New York in 1816 but is now based in North Carolina, was acquired in 2007 by the private equity firm Cerberus Capital Management for $118 million. The firm rolled it up with other gun manufacturers, including the maker of the Bushmaster rifle, into a conglomerate called Freedom Group.


An attendee examining a Remington bolt-action rifle at the N.R.A.’s annual convention in 2015.

Karen Bleier/Agence France-Presse — Getty Images

Under Cerberus, Remington’s sales initially boomed as total gun sales in the United States grew. In 2012, nearly 8.6 million guns were made in the United States, up from about 3.3 million in 2002.

But Remington’s sales have slowed in recent years, notably after 20 children and six adults were killed in 2012 at Sandy Hook Elementary School in Newtown, Conn. Public outrage over the massacre zeroed in on Remington after the authorities reported that the gunman had used an AR-15-style rifle made by the company.

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Claire’s, the Teen Jewelry Chain, Files for Chapter 11 Bankruptcy

But Claire’s, which presents itself as “A Girl’s Best Friend,” is hoping for a happier transition. The chain said that its ear-piercing business is Amazon-proof because customers must show up in person for the service.

In a regulatory filing, the company acknowledged that mall traffic is declining and that it planned to close some of its underperforming stores and renegotiate leases. The chain, which also owns the Icing brand, a jewelry chain targeting older shoppers, projected that its total store count in North America would slide to 1,400 locations in 2022 from 1,570 at the end of last year.


Besides accessories, Claire’s is known for its ear-piercing services — the retailer said it provided the service 3.5 million times last year.

Michelle V. Agins/The New York Times

Claire’s said it secured $135 million in debtor-in-possession financing and support for its debt-slashing plan from top-priority debtholders like the Elliott Management and Monarch Alternative Capital hedge funds.

Apollo owns 97.7 percent of Claire’s, which had $2.1 billion in long-term debt at the end of 2017.

Claire’s said it was up-to-date with its vendor payments and had “ample liquidity.” It plans to emerge from bankruptcy in September, ahead of the crucial holiday season.

“We will complete this process as a healthier, more profitable company, which will position us to be an even stronger business partner for our suppliers, concessions partners, and franchisees,” Ron Marshall, Claire’s chief executive, said in a statement.

The bankruptcy, which Claire’s said would not disrupt store operations and would not affect its international subsidiaries, follows several drastic moves by the company in recent years to adjust its debt load and shake up its management ranks. Mr. Marshall, along with the company’s chief financial officer, has been in his role for less than two years.

The budget accessories business is a difficult one, driven by promotions and assailed by competition from online merchants, discount chains like Walmart and fast-fashion brands like H&M, said Marshal Cohen, the chief retail analyst at the NPD Group market research firm. Companies targeted by leveraged buyouts are often further constrained.

“When they get saddled with all of this debt, it really limits their ability to stay on top of the game and ahead of the curve, so they end up playing catch-up and lose their relevance in a market where relevance is critical,” he said.

But Claire’s seems strong enough to recover from bankruptcy, Mr. Cohen said.

“Claire’s at least is not behind the 8-ball yet — they can still regain momentum,” he said. “They just have to recognize that consumers have changed in a dramatic way.”

Claire’s, which is based in Hoffman Estates, Ill., traces its history to the founding of a chain of wig stores in the South in 1961. In 1973, the company blended with Claire’s Boutiques, a small accessories chain in the Midwest, creating Claire’s Stores.

The company began piercing ears in 1978. Last year, in the United States, it performed the service 3.5 million times.

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