The economic woes that have beset the major corporations in the United States are far from over, despite the strengthening of the US dollar against the Israeli shekel in recent days.
On Monday, an American icon in the publishing world, The Tribune Company, became the latest victim of the economic spiral downwards in the United States and filed for bankruptcy protection. The Tribune is the largest employee-owned media company in the U.S., according to a statement on the company's website.
The company publishes The Los Angeles Times, The Chicago Tribune, The Baltimore Sun, The Hartford Courant and The Orlando Sentinel as well as seven other newspapers. It also operates a chain of 23 television stations, a national cable television channel and a host of other media outlets.
Crippled by a $13 billion debt, The Tribune was taken over a little less than a year ago by Chicago real estate mogul Sam Zell, a major Jewish philanthropist whose donations in Israel include $3.1 million in support to the Herzliya Interdisciplinary Center as well as donations to the Israel Center for Social and Economic Progress think tank. He has also donated to the American Jewish Committee and a Chicago Jewish day school named after his father, according to The Forward.
As the economy began its nosedive, Zell sold off one of the company's most profitable newspapers, Newsday, to Cablevision in May for a reported $650 million in hopes of stemming the bleed, but it wasn't enough to stop the crash.
One segment of the company's holdings will not be touched, however: "The Chicago Cubs franchise, including Wrigley Field, is not included in the Chapter 11 filing. Efforts to monetize the Cubs and its related assets will continue," read the release.
The company reassured consumers in a news release on its website that it would "continue to operate its media businesses during the restructuring, including publishing its newspapers and running its television stations and interactive properties without interruption, and has sufficient cash to do so."
Zell noted that the economic environment in which he became chairman and CEO was less than conducive to creating economic success within his first year: "...factors beyond our control have created a perfect storm -- a precipitous decline in revenue and a tough economy coupled with a credit crisis that makes it extremely difficult to support our debt."
He expressed optimism, however, that filing for Chapter 11 would help the company regain its equilibrium and return to its former economic health, albeit slowly.
Bank of Israel Maneuvers to Avoid Similar Scenarios
Moves by Bank of Israel Governor Stanley Fischer to avoid similar scenarios in the Jewish State have been supported by the majority of senior central bank officials.
A review Monday of the minutes of the most recent board meeting showed that three out of five of the officials backed Fischer's plan to reduce the key lending rate by half a percentage point. The other two officials recommended a quarter-point reduction.
On November 24, the Bank of Israel reduced the key lending rate by half a percentage point, in concert with its estimate for Israeli growth in 2008, which it adjusted to 1.5 percent, downward from a prior 2.7 percent forecast.
"Looking to the future, the risk of inflation in Israel has fallen considerably," read the minutes. "It was stated that the purpose of reducing the interest rate was to help lower the cost of credit, against the background of the latest rise in the cost of bank credit and the significantly reduced ability of companies to obtain credit from non-bank sources."
The next decision on the Bank's prime lending rate is set for December 29.