Money Odds & Ends

Milwaukee lawyer co-authors bankruptcy and restructuring book
Timothy Nixon, an attorney and shareholder with the Milwaukee law firm Godfrey & Kahn, S.C., recently co-authored the book "Bankruptcy and Financial Restructuring Law 2008," published by Aspatore Books of Boston. The book discusses recent changes in laws, decisions, and policies that have affected the practice of bankruptcy and financial restructuring laws. For more information, visit http://www.aspatore.com/store/bookdetails.asp?id=679.

Nixon is team leader of Godfrey & Kahn’s Business Finance and Restructuring Practice Group. He is a frequent lecturer and speaker on matters involving bankruptcy law and has been published extensively. He also has represented clients in cases before the United States Supreme Court, the Court of Appeals, as well as in bankruptcy courts throughout the United States. His cases have included some of the largest bankruptcies filed in the United States.

Van Hollen urges FCC to block satellite radio station merger
Citing concerns about "anti-competitive" and "anti-consumer effects," Wisconsin Attorney General J.B. Van Hollen has asked the Federal Communications Commission (FCC) to utilize its role to carefully review a proposed merger of the nation’s only two satellite radio companies. The U.S. Department of Justice decided earlier this month to permit Sirius Satellite Radio Inc. to acquire rival XM Satellite Radio Holdings Inc. for $5 billion. The FCC still has to sign off on the deal. In a letter to FCC chairman Kevin Martin, Van Hollen asked the commission to take into account the broad public interest of the proposed license transfer between XM and Sirius.

"In terms of coverage, broadcast radio does not have the reach of satellite radio. Milwaukee, Wisconsin’s largest city, receives only 41 local radio signals. Although this is a significant amount, it pales in comparison to XM or Sirius, each of which has over 100 channels a piece," Van Hollen wrote to Martin. "About 1.2 million Wisconsinites live in areas that receive fewer than 15 broadcast radio channels. Rural areas in Wisconsin are the most severely affected, some receiving less than five radio stations. For people living in and driving through these areas, this license transfer would represent a significant reduction in the number of channels available to meet their needs and will adversely impact the public interest."

Van Hollen, a Republican, said he issued the letter to the FCC after the Antitrust Division of the U.S. Department of Justice announced that it would not attempt to block the merger, "despite the fact that the merger would eliminate all competition in the satellite radio industry." "The FCC’s standard for reviewing a license transfer is broader than the United States Department of Justice’s merger review, and I think that this transfer should raise several red flags for the FCC," Van Hollen said. "The Sirius-XM deal is anti-competitive and anti-consumer."

Milwaukee companies for sale hold their value
Milwaukee area businesses for sale held their value in the first quarter, but increased pressures from the credit crunch could cut into those multiples in the second quarter, according to BizBuySell.com, a web service that lists businesses for sale. The median asking price for businesses for sale in the Milwaukee area through the web site now stands at $392,500, which is up from $335,000 in the fourth quarter of 2007. The data is based on 98 Milwaukee-area businesses that are currently listed at BizBuySell.com. Those listings include listings from local business brokers, as well as "for sale by owner" listings that have been listed by the business owner without the assistance of a business broker. The first-quarter Milwaukee area businesses listed had a median revenue of $517,540, up from $500,736 in the previous quarter. The median cash flow, meaning the money that comes out of the business over the course of a year, is $118,334, vs. $118,796 in the previous quarter. According to BizBuySell.com, business owners in the Milwaukee area will typically ask for, on average, a revenue multiple of 1.04 (up from 0.97 in the prior quarter) and a cash flow multiple of 3.74 (up from 3.56 in the prior quarter).

Nationally, business valuations are down. The median asking price for a small business in the United States declined to $250,000 at the end of the fourth quarter, a $5,000 decrease relative to the prior quarter. "The business valuations in Milwaukee are materially different from what we are seeing on a national basis. Milwaukee’s valuations are much higher than the national average. In addition, the market for Milwaukee small businesses appears to be changing, with increasing valuations relative to the previous quarter. On a national basis, valuations are declining," said Mike Handelsman, general manager of BizBuySell.com. "We expect there to be downward pressure on Milwaukee business valuations going forward as retiring baby boomers put their businesses up for sale to fund their retirements. Our internal research suggests that one out of three active small businesses is owned by a baby boomer. The ongoing credit crunch is also empowering buyers who do have cash, allowing them to buy businesses at a lower price than they might have had to pay in the past. For all of these reasons, it’s a buyer’s market right now," Handelsman said. To view the complete Milwaukee market data, visit http://www.bizbuysell.com/news/insight_reports/Milwaukee-Waukesha-West%20Allis,%20WI.xls.

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