Monday, March 28, 2016

Former Blackstone-Park Hill Group Partner Defrauded Investors of Nearly $100 Million

While major private equity founders complained about their undervalued stock prices one of their brethren ripped off sophisticated investors for nearly $100 million.  ZeroHedge reported:

"a highly reputable executive with a just as reputable private equity firm was arrested and charged with securities fraud. Andrew Caspersen, a Harvard Law School graduate and a partner at the Park Hill Group, an advisory firm that up until last fall had been a part of the Blackstone Group, was accused of defrauding numerous institutional investors out of $95 million through fake private equity investments. 
Private equity is overly image conscious.  In the case of Andrew Caspersen there was no substance behind the image.  He wagered his ill begotten gains, losing them in options trading. 

Tuesday, March 22, 2016

Alaska Dispatch News Promotes Publisher's Pt Capital

What news source hosts a seventeen page brochure for an Arctic focused private equity firm?  Alaska Dispatch News does for Pt Capital.  ADN Owner/Publisher Alice Rogoff sits on Pt Capital's Advisory Board.

An ADN search on Pt Capital produced thirteen articles in addition to the investment brochure  The most recent piece from November 2015 promoted Pt Capital's first PEU fund offering:

Pt Capital, an Anchorage-based private equity firm investing exclusively in four Arctic countries, announced this week that it attracted more than $125 million to its inaugural fund.

Pt Arctic Fund I requires a minimum investment of $10 million and promises a compounded annual return of at least 20 percent, according to its brochure, filed in November with the U.S. Securities and Exchange Commission. 
ADN disclosed: 

Alaska Dispatch News publisher Alice Rogoff is a senior adviser for Pt Capital and holds founding stock in the parent company. 

The fund is bullish on the idea that a warming Arctic will eventually open up a wealth of development opportunities in the oil, gas and shipping sectors in the next two to three decades.
Rogoff's ADN and Pt Capital held an Arctic Circle Summit on Alaskan Shipping and Ports the week before President Obama dined at Alice Rogoff's home.

The purpose of the meeting was to build partnerships to develop safe and reliable shipping through the Alaskan Arctic. These partnerships will be necessary to finance needed ports of refuge, search and rescue equipment, transshipment facilities and icebreakers. 
On the morning of Day 1 Rogoff opened with:

I want to take one quick thank you to our sponsors.... Last but not least I want to say a quick word about Pt Capital...  For those of you who don't know Pt Capital is a brand new private equity firm in Alaska.  Well, I'm not sure what brand new means, but new on the scene and they are really borne out of our Arctic conferences.  It's one of the most tangible things that we've done.  We'll have boots on the ground in the Arctic.  They're dedicated to Alaska and the Arctic.  It's where their investment dollars will go.
Rogoff is Senior Advisor and part owner of Pt Capital via her founders' stock.  She owns the Alaskan Dispatch News, the largest newspaper in Alaska.  Rogoff shamelessly promoted both as the eyes of the world turned to Alaska and President Obama's visit.  

Today's synergistic business world is likely the death knell of investigative journalism. Alaska could be a role model for the country in this light.

Update 8-15-19:  It turns out daughter Gabrielle Rubenstein is also a co-founder of Pt Capital in 2013.  Add another layer of conflict for when Rogoff was publisher

Monday, March 21, 2016

Rubenstein's Wife Charts Future of Alaska Dispatch News

Alice Rogoff, the wife of Carlyle Group co-founder David Rubenstein, said her news organization is in "investment mode."  She wrote:

At Alaska Dispatch News – the company – we have a split identity.  Of course, first and foremost, we are a news organization. But we’re also a living, breathing small business (or medium size, really, given our 200-plus employees).

This is an update about the state of our business, and some thoughts about our future.
Rogoff committed to producing a physical newspaper for fifteen years.  Alaskans will have news they can touch and feel.  Otherwise ADN sounds like an advertising driven organization.

As most of you appreciate, as a business, what we “sell” is not just news but advertising and marketing tools for you to reach our readers. And as our industry evolves, we are growing to offer a more complicated and nuanced set of products.

Some even reach beyond the bounds of our own website and print publications. For example, readers and advertisers alike have been enjoying the sponsored giveaways hosted on our social media accounts. We are also helping our Alaska advertisers take their messages beyond by offering “programmatic” ad campaigns on the web managed in real time by our own in-house ad staff.

You may also have noticed what we call “Sponsored Content” on our site. These stories have traveled the history of the Iditarod Trail and explored the culinary delights of Alaska-grown seafood and produce. They have celebrated the Teachers of Excellence, sponsored by BP. 
That's the same BP that brought Americans the 2011 Gulf Oil Spew (which killed eleven people), the 2005 Texas City Refinery explosion (that killed fifteen and injured 180 people) and three Alaska pipeline spills, two in 2006 and the other in 2009.  It's the BP that gave CEO Bob Dudley a 20% increase in executive pay for sacking 7,000 jobs and getting BP the biggest financial loss in the company's sordid history.

Oddly, in August 2007 BP CEO Lord John Browne left to join Riverstone Holdings, a joint venture partner with The Carlyle Group.  Which brings us back to Mrs. Rubenstein's Alaska newspaper that partners with BP on Sponsored Content.  ADN's future includes:

We’re always looking for the next great idea for a product that provides great content to our readers and maximum exposure to Alaska businesses.
I don't believe the ADN has a split identity at all.  It's a tool for development, both energy and economic. The future is profits.  That means not digging to find private equity bribes to access public pension funds.  The Carlyle Group and Riverstone paid a combined $70 million to make a New York pension fund investigation go away.  

The Carlyle Group started after David Rubenstein and his partner earned tens of millions in fees from selling Alaskan Native tax losses to corporations. The New Yorker reported:

The episode became known in Washington business lore as the Great Eskimo Tax Scam
I'm afraid Alaskan investment is for the taking and Rogoff's newspaper will not act as a public counterbalance, much less an investigative entity.  Alaskans themselves will need to be wary of who is behind what and why.  Greed is the norm in today's investment world.   

ADN, the largest daily newspaper in Alaska,  is in investment mode.  So is Alice Rogoff's Pt Capital, an Alaska based private equity underwriter.  ADN missed their intersection in the past.  And that points to another aspect of Rogoff's ADN future.  

Banks Reject Financing PEU Deals

WSJ reported:

Banks are increasingly turning down companies seeking financing to pay for debt-laden takeovers after the recent market rout left them saddled with debt from earlier deals.

Credit Suisse Group AG, Jefferies Group LLC and Wells Fargo & Co. are among the firms turning down new requests for financing—typically from low-rated companies—as they retreat from the lucrative but risky business of backing debt-heavy buyouts, people familiar with the matter say.
They highlighted banks balking over Carlyle Group's Veritas buyout:

In November, a group including Bank of America Corp., Morgan Stanley, UBS Group AG and Jefferies struggled to sell about $5 billion of loans and bonds they had guaranteed for Carlyle Group LP’s $8 billion buyout of Symantec Corp.’s Veritas data-storage unit, according to people familiar with the matter. Investors balked at buying the debt after Veritas reported a sharp decline in quarterly earnings, the people said. 

 Carlyle ultimately renegotiated the deal in January at a price about $1 billion lower. Even so, the banks have yet to sell the loans and would face a loss of at least $250 million if they tried to unload the debt in current market conditions, bankers say.
The market for buying and selling companies cycles based on corporate valuations and deal financing.  Investors are smacking down junk this NCAA basketball tournament season.  Ironically the East final will be played in the Wells Fargo Center. 

Sunday, March 20, 2016

Secretive CEWG Has Carlyle Group Ties

The Intercept reported on a secretive lobbying group:

“The Commercial Energy Working Group is one of the most active – and secret – organizations seeking to undermine energy market regulations,” Slocum told The Intercept. “The purpose of my complaint is to force the group to start identifying its membership.”

Under the Honest Leadership and Open Government Act of 2007, all lobbying organizations registered with the federal government must list the names of any business that has contributed more than $5,000 to them in any one quarter. But the CEWG “does not disclose the individual companies or entities that constitute its active membership,” according to Slocum’s letter.
The group filed its first lobbying disclosure in 2013  However the Working Group of Commercial Energy Firms has been influencing public policy since 2010.  The group wrote the Secretary of the Commodities Futures Trading Commission a number of times to influence swaps regulation under Dodd-Frank:

August 19, 2010 - Rule making for Futures Commission Merchants
October 22, 2010 - Registration Requirements
November 5, 2010 - Definition of Commercial Risk
March 22, 2011 - Rule making under Title VII
January 19, 2012 - Bloomberg article on Swaps Lobbying
Lawyer Alexander Holtan migrated from Hunton Williams to Sutherland, Asbill Brennan in 2013.  That's when the group changed names and began filing lobbying reports.

During the 2nd quarter 2015 the Commercial Energy Working Group spent $60,000 lobbying on the following issues:

The U.S. Commodity Futures Trading Commission reauthorization; regulation of derivatives; treatment of derivatives and physical commodities in bankruptcy; and H.R. 2289, the Commodity End-User Relief Act.
Bets on energy commodities are far from TV, movie or music territory.  But there may be a good story in this mess.  Vitol, a member of the Commercial Energy Working Group by attendance at meetings with the CFTC, recently did a joint venture deal with The Carlyle Group on Varo Energy.

Carlyle is renowned for hiring politically connected people who can influence elected officials "without lobbying."  The New Yorker described Rubenstein:

“His vision was to combine capital with politically connected people whose phone calls are accepted around the world."

Carlyle co-founder David Rubenstein hosted Vice President Joe Biden on Thanksgiving and dined numerous times with President Obama, as did Rubenstein's wife Alice Rogoff during Obama's Alaska trip

Seeking Alpha reported Carlyle and Vitol were the first exporters of U.S. oil to Europe.  Together Carlyle and Vitol have an insider on the Commodity Futures Trading Commission, Vitol's Ron Oppenheimer.  Besides being a regulator Oppenheimer is part of the secretive Commercial Energy Working Group.

Welcome to the Government-Corporate Monstrosity, Eisenhower's Military-Industrial Complex on trillions in federal steroids.  

Update 4-13-22:  Carlyle doubled its stake in Varo in February 2021.   

United Technologies CEO Allocates 2,100 U.S. Jobs to Mexico

Hartford Courant reported:

Two subsidiaries of Farmington-based United Technologies Corp. are shutting heating and ventilating parts manufacturing plants in Indiana, eliminating more than 2,000 jobs as operations move to Mexico.

Carrier, a manufacturer of heating, ventilating, air conditioning and refrigeration, said it will relocate its Indianapolis manufacturing operations to a site near its manufacturing plants in Monterrey, Mexico, over three years beginning in 2017.
United Technologies CEO Gregory Hayes garnered an individual performance highlight for 2015.  The board praised him for his:

Rigorous commitment to a disciplined capital allocation strategy, evidenced by the $12 billion we returned to shareowners in 2015 through dividends and share repurchases (including the $6 billion accelerated share buyback program announced in November 2015)
Hayes' disciplined capital allocation strategy earned him over $10.7 million in executive compensation for 2015. That's significant capital allocated to his personal pocketbook at the expense of other company workers.  

Hayes' accelerated stock buyback program will reduce public float and increase UTX's earnings per share numbers, which factor into Hayes' executive incentive pay via his bonus and performance share units (PSU), which comprise 79% of his annual compensation:

The 2015 EPS results of $8.61 per share included discontinued operations and the gain realized from the sale of Sikorsky Aircraft. The Committee excluded discontinued operations from EPS, which includes this gain, for PSU vesting measurement purposes. This resulted in an EPS from continuing operations of $4.53. The Committee made additional adjustments to exclude restructuring, non-recurring, and other significant, defined items unrelated to operational performance (see Appendix B on page 86 for details), resulting in an adjusted EPS of $6.30 and a vesting factor of 88%.
Move 2,100 jobs to Mexico at $3 an hour and how much might CEO Hayes earn in performance share units?  The global race to the bottom only applies to worker pay and benefits.  Executives stack each others' boards and dole out a plethora of high priced goodies.  In the case of UTX perks include an executive physical, leased car and $16,000 for financial planning.

How much will the Monterrey shift enrich Gregory Hayes pay?

Thursday, March 17, 2016

Avoiding Scrutiny & Accountability

Recent stories showed the Obama administrations letting insiders and corporations off the hook.  The first dealt with the Department of "Just Us":  Fortune reported:

In late 2010, in the waning months of the Financial Crisis Inquiry Commission, the panel responsible for determining who and what caused the financial meltdown that lead to the worst recession in decades voted to refer Robert Rubin to the Department of Justice for investigation. The panel stated it believed Rubin, a former U.S. Treasury Secretary who has held top roles at Goldman Sachs and later Citigroup “may have violated the laws of the United States in relation to the financial crisis.” Rubin, the commission alleged, along with some other members of Citi’s top management, may have been “culpable” for misleading Citi’s investors and the market by hiding the extent of the bank’s subprime exposure, stating at one point that it was 76% lower than what it actually was.

No government action was ever brought against Rubin. And there is no evidence that Department of Justice acted on the crisis commission’s recommendations.
The Obama administration knows how to hide the extent of a disaster, financial or natural.  OMB Chief Peter Orszag, who later landed an executive position with Citigroup, minimized the extent of the BP Oil Spew in the Gulf of Mexico.

Obama's IRS took more of a hand's off approach with corporate auditing:

Large U.S. corporations had a good tax-filing season in 2015. Firms with at least $10 million in assets faced the lowest IRS audit rates in at least a decade as the tax agency coped with staffing declines, new data show.
Another way to avoid scrutiny and accountability is to coopt the regulator or better yet, self regulation.

Wall Street’s top lobbying group wants a closer relationship with the policy makers that oversee its member firms. 

John Rogers, chairman of the Securities Industry and Financial Markets Association and a top official at Goldman Sachs Group Inc., on Tuesday called for a standing body made up of bankers and regulators to discuss developments in policy, examination and enforcement. A key responsibility for the panel would also involve regularly providing guidance on postcrisis rules and other issues to financial firms.
Even those caught red handed only pay a temporary price, as evidenced by the SEC's approving Steven Rattner's fee income deal with Guggenheim.  Bloomberg reported:

The former head of Quadrangle Group, Rattner has faced limits on his financial activities after the 2010 resolution of an SEC probe into kickbacks in connection with a New York state pension fund.

President Obama should be rewarded handsomely for his administration's service to the insider class.

Tuesday, March 15, 2016

Allergan to Enrich "Let Go" Executives Further

Bloomberg reported:

Three days before Allergan Plc announced a $160 billion deal with Pfizer Inc. last year, its board sent a message of reassurance to its executive team: if you’re let go after the acquisition closes, we’ll cover the tax bill for your severance packages.

As a result, Allergan could end up reimbursing its five top managers as much as $86 million for taxes they’d have to pay on top of ordinary income taxes if they aren’t offered jobs in the combined company.

The tax reimbursements would come on top of exit packages worth a combined $300 million for the five executives if they were let go.
Allergans top brass had this to say about employees in their Q1 2015 earnings call:

I am so proud of each of the people on our combined global team. One thing is clear: this combined team rallies quickly around surprising opportunities, focuses on the key objectives and executes flawlessly. When it comes to execution, we are like a finely tuned, high-performance engine.

I would just, again, close with saying that this team has continued to take bold and decisive action to create value
The "value" employees created will accrue to top executives in an inordinate manner by the board's action.  Top executives are in a class by themselves, distinguished by greed.

The New Yorker offered:

All things considered, it’s hard to avoid seeing the merger proposal as a cynical move designed to boost Pfizer’s stock price and generate a windfall for the company’s senior managers, who are compensated mainly in equity.
At the JP Morgan Healthcare Conference on 1-12-2016 top brass said the deal was about growth and efficient capital allocation around the globe.  Allergan's tax bill alleviating separation deal efficiently allocates millions in capital to executives no longer employed after the merger.  But alleviating taxes is the basis for the deal.  Companies and executives hate paying taxes.  Only the little people pay in our PEU world. 

Monday, March 14, 2016

NPR Unsure What to Do with PEUs

Lord John Browne of Madingley, the Don Blankenship of oil refining, spoke to NPR about corporate social responsibility last week.  BP's Texas City refinery blew up eleven years ago resulting in 15 deaths and injured 170 more.  Browne's deposition came after his resignation as BP's President.  He denies knowledge of operations changes from corporate executive edicts that contributed to the disaster.  Someone truly socially responsible would've accepted responsibility. but Browne already moved on to his next big money gig.

His 2008 deposition stated:

Q. (BY MR. COON) Mr. Browne, you indicated that your present employment is with Riverstone Holdings?
A. That's correct.
Q. Is that your primary position at this time, sir?
A. It is.
Q. And that is a holding company that is associated with The Carlyle Group, is it not, sir?
A. Carlyle is a shareholder in the company.
Q. Do you know something about the shareholders in The Carlyle Group, sir, that you work for?
A. Well, we don't work for The Carlyle Group. The Carlyle Group is a shareholder in Riverstone Holdings, L.L.C., and I am the managing partner of Riverstone Holdings, L.L.P., which is owned by the L.L.C.
Q. Yes, sir. And if you go to the Carlyle website, you can see the list of their locations around the world; and one of them that they, interestingly, list is Riverstone. Do you know why that would be?
A. I don't know. I haven't seen their website.
Q. Okay. Do you know some of the shareholders in The Carlyle Group, sir?
A. I know the -- I met, several times, the founders, Mr. Dan D'Aniello, Mr. David Rubenstein and Mr. Bill Conway.
Which leads us to the next NPR story.

Lord John Browne and Carlyle's David Rubenstein have deep political connections.  They've each used their contacts to enrich themselves handsomely as private equity underwriters.  PEUs preferred tax status is a social cancer that this pair enjoyed while their businesses failed employees and customers.  The Carlyle Group's LifeCare Hospitals had 26 deaths in the aftermath of Hurricane Katrina in August 2005.

How much has Lord John Browne and David Rubenstein saved in preferred taxation from 2005 until now?  That's a question an alert media, who understands the deeper relationships between politicians and the PEU boys, might ask. 

Thursday, March 10, 2016

Rubenstein Recalls His Book

Showbiz*411 reported:

A few years ago Rubenstein signed a contract with HarperCollins for a book called “Beyond Wall Street: Inside The Rise Of Private Equity.” It was listed in all the HarperCollins catalogs and due for publication in 2009. Well, calendar pages flew by, and the most recent date scheduled was for December 2015. But that date came and went. Now I’m told that Rubenstein has pulled the book, even though it was written, edited, and ready to be sold.
Google Books promoted Rubenstein's book with:

A founder of the Carlyle Group explains how a rise in private equity is changing the future of investing, in a guide that covers how private equity works, the inner functions of private equity firms, and how everyday investors can make significant returns.
Book hawked the book with:

Rubenstein offers the first look at an industry that touches ordinary investors through pension funds, university and charitable endowments, and funds that may someday be available to almost anyone who is attracted to returns that consistently outperform the stock market
I'd like to think PEUReport chronicles the meteoric and frightening rise of private equity underwriters over the last nine years.  WSJ just did a piece on a Carlyle fund that echoes these themes.

Monday, March 7, 2016

Another Rubenstein Carried Interest Story

ProPublica reported how Carlyle Group co-founder David Rubenstein ensured wealthy private equity underwriters (PEU) would continue paying minimal taxes via their preferred carried interest taxation.

On June 8, 2010 Rubenstein’s cell phone rang as he was speaking to supporters of the Economic Club, at the Phillips Collection. He left the stage to take the call. Among those in the audience was Gary Shapiro, the consumer-electronics lobbyist who was Rubenstein’s travel companion to Japan in the ’80s. After a few minutes, Shapiro recalls, Rubenstein returned and said, “That was a senator. That one call just saved us on carried interest.”
PEUReport readers know how Presidents George W. Bush and Barack H. Obama curry favor by dining with Mr. Rubenstein and his wife Alice Rogoff.  ProPublica also told a number of dinner stories.

The first serious run at removing the carried interest loophole came in 2007.  PEUs won.  Another attempt occurred in 2010.  PEUs won.  The next year America learned about the policy making billionaire.

Today elected officials are no closer to righting this wrong.  Americans are clearly concerned about our abysmal leaders, who seem to serve billionaires over the common man.

It's been a tough decade since the public learned about carried interest and our elected officials sat on their fattened hands.  Thank heaven ProPublica noticed what others have.  It's a bipartisan world with lots of love for PEUs.  Politicians Red and Blue love PEU.

Sunday, March 6, 2016

Lewitt Identifies Two Worrisome PEU Moves

Michael Lewitt's Sure Money reported:

The private equity industry is under serious pressure right now.

With the Super Crash on the way, financial stocks are taking a beating – particularly private equity stocks like Apollo (APO), Ares (ARES), KKR (KKR), Blackstone (BX), Carlyle (CG), and Fortress (FIG). The thing all of these companies have in common is heavy exposure to the high debt levels that built up since the financial crisis. The market is telling us that it is very worried that the Debt Supercycle is over and that a lot of this debt isn’t going to be paid back.
Carlyle is off its lows from several weeks ago.  Lewitt is concerned about two private equity practices given the huge debt levels corporations. i.e PEU affiliates, have taken on.  Private equity firms also package, sell  and service corporate debt through collatoralized loan obligations (CLO). 

Concerning practice #1 is well know to PEU Report readers., dividend recaps or what I call dividend bleeding.

The first “private equity indicator” I watch for is an increase in the frequency of “dividend deals.”

Also known as a “dividend recapitalization,” this infamous transaction involves a private equity‐owned firm borrowing money to pay a dividend distribution to its owners. We’ve seen this behavior all over the news lately – KKR-backed GenesisCare seeking $285m in loans, American Tire Distributors acquiring $805m in junk bonds to pay dividends to TPG Capital, JCrew borrowing $500 million to cash out its shareholders, and Vogue International LLC borrowing over $200 million to pay a shareholders’ dividend to The Carlyle Group.

The debt raised in these transactions is not used to enhance the business of the borrower in any way, for example, by building additional facilities, funding research and development, creating new products, or hiring new workers. The money instead is paid out to the private equity sponsor in order to reduce the capital it originally invested in the business.  It saddles companies with more debt while reducing or eliminating any skin that the private equity firm has in the game – leaving bondholders holding the bag.
Practice #2 is monetizing a PEU affiliate via sale to another PEU.  Rarely is the price paid revealed in a PEU to PEU deal.

This second practice that indicates that the credit cycle is entering its terminal stages is the phenomenon of private equity‐owned companies being sold by one buyout firm to another, which I call “passing the hot potato.”

This has been happening at a dizzying pace lately – if you’ve been tracking our failing private equity firms, you’ve seen Ares Management buying CHG Healthcare Services from J.W. Childs Associates and snapping up Farrow & Ball from European Capital Limited; KKR selling off TASC Inc. to Engility Holdings; Blackstone and TPG teaming up to buy Kensington Group from Investec; and Blackstone selling GCA Services to Goldman Sachs Group Inc’s private equity arm and Thomas H.Lee Partners LP.
Selling an affiliate to a peer avoids public disclosure.  It enables the repricing of asset values and debt to be reissued.  It also enables both PEUs to charge deal fees.

The real reason such deals are done, of course, is to generate fees for private equity firms. The selling firm is able to generate a “realization event” that triggers a “transaction” fee and allows it to return capital to investors, while the buying firm is able to pay itself a transaction fee on the purchase. The wonder is that lenders continue to finance such transactions, which are done at higher and higher multiples of cash flow and contribute little to economic growth.
Carlyle frequently charges a huge fee to make up for losing years of expected PEU management fees.

Private equity firms have mastered the art of enriching themselves at the expense of virtually everybody else with whom they come into contact in the economy.  
Lewitt believes the credit cycle is nearing a bad end.  That would spell trouble for PEUs.

Thursday, March 3, 2016

City of San Angelo Sues PEU Owned Hirschfeld

The Standard Times reported:

What began as a promising multimillion-dollar economic venture to generate hundreds of wind energy-related jobs in San Angelo turned into an undertaking that blew south.

The city of San Angelo Development Corp. and the city are seeking to recoup more than $2.7 million in damages, attorneys' fees and minor costs resulting from a 2009 investment to bring a wind turbine tower fabrication plant to town.

COSADC and the city hope to recover the money through a summary judgment hearing scheduled Wednesday in the 119th District Court and avoid going to trial.
The City's press release cited the difficulty negotiating with a private equity owned company.

Negotiating with the private equity hedge fund that today controls Hirschfeld is more challenging than partnering with local ownership with whom the City has had close personal and working relationships for decades.
Texas politicians, starting with Governor Rick Perry, trained PEU owners and affiliates that public money was loose and nearly free.

 "The City and the COSADC could not agree to a minimal repayment," the release stated. "Doing so, and allowing Martifer-Hirschfeld to walk away with millions in taxpayer dollars, would constitute a serious breach of public trust."
It's hard for Insight Equity to monetize Hirschfeld with a multi-million dollar lawsuit hanging over its head.  The City of San Angelo is the first I've come across that cited a PEU owner in suing for economic nonperformance.  I hope it becomes a trend.