Daily Archives: September 30, 2009

Hollywood protects its own

While Whoopie Goldberg, Angelica Houston and Woody Allen (there’s a surprise) rush to Roman Polanski’s defense, ABC News has thoughtfully brought back the original story of this animal plying a 13 year old girl with Quaaludes and champagne and then enjoying oral, vaginal and anal sex with her. “But he’s served his time,” his Hollywood friends wail. All 42 days of it. Let him rot in jail.

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First Amendment, restraint of trade and other musings

What are the rights of a member of a private organization like the National Association of Realtors (NAR) to speak candidly and publicly on the merits of a specific property? Depending on the outcome of today’s super-secret double-probation grievance hearing I endured today, I may have occasion to find out. Until now, the First Amendment was of academic interest to me but that may change.

On the one hand, a private organization can probably limit the free speech of its members to some extent – can you denounce the President of your country club without penalty, for instance? I think not. And, as a member of the NAR, I am bound to follow their ethical rules if I want to remain a member.

But membership in the NAR is not voluntary – I must belong if I want to sell real estate in Greenwich and I suspect that places membership, and the rights I give up, in a less powerful position vis a vis limiting my speech.

And then there are anti-trust considerations. Can the NAR, under the guise of enforcing an ethics rule, prevent a member from publicly opining on the relative values of specific properties? That may protect one group: sellers, but disadvantages the other half of the equation, buyers. I would think that shutting off that speech would constitute a restraint of trade, cutting buyers off from an objective (even, for the sake of argument, subjective) source of information on which to base, even partly, their decision to buy.

As noted, I am not a first Amendment scholar, and, pending a decision on sanctions that may or may or may not be levied against me, I don’t want to become one. But I certainly don’t intend to stop blogging or selling real estate, so if worse comes to worse, my legal education may continue.

This could be of interest to other people, because I am not the only real estate agent blogging out there nor am I the only member of a non-voluntary organization who blogs on matters that may be proscribed by an organization’s rules. I am headed to Europe tomorrow and blogging will be light or non-existent, depending on Internet access but I’ll be back, and we can resume the discussion then. In my absence, any First Amendment lawyers out there or you, Walter, over there at Overlawyered.com,  who wish to chime in, please fire away.

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Congress has its priorities

This story was reported on NPR last Sunday but I forgot to bring it up. Now that Instapundit has linked to it, though, here it is: we are about to lose our ability to send out deep space probes due to a lack of specialized plutonium fuel. If I have the NPR story right (and the link is to Popular Science which will have it right), we haven’t made any of this stuff since the 19080s and we have enough of it left for one, maybe two more flights. After that, nothing, and it will take at least eight years to make more.

Local flights can use solar energy but deep space has no light and hence, no fuel. Obama had put $30 million into next years budget to re-start production but the House cut that funding in half and the Senate eliminated it altogether. This strikes me as a real shame. As one scientist interviewed by NPR said, “ten years from now, people are going to look at this situation and ask, ‘what were they thinking?’ “. Where’s a spendthrift Congress when we need one?

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Shhh! Do you want to know a secret?

1 Benjamin Street

1 Benjamin Street

Overpriced houses don’t sell. And not because of blogs, either. This nice little Old Greenwich cape came on the market at $1.895 million. I showed it to my clients long after, when it had been marked down into the $1.4 range and they, unprompted by me, asked what the owners were smoking.

How could they have reached that conclusion? Because buyers, unlike many sellers, are realists. My clients had  spent several weeks with me looking at houses in this price range and they knew as well as the most experienced agent what was a good price and what was just nuts.

In any event, they didn’t bid on this one – they’ve grown tired of being told they’re being insulting – and it sold yesterday for $1.180. Which was a good, sensible price.

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Round Hill land sale, with house

549 Round Hill Rd

549 Round Hill Rd

1775 house on 7 + acres on the corner of Round Hill and Close (Burying? – up there somewhere). Listed at just $5.2 million, sold for $4.5 million. I guess that’s a useful data point for a building lot, though I hope the antique stays – it should, because 7 acres in a 4 acre zone leaves plenty of FAR room for a new house as well as this one.

19 Doverton, mentioned here yesterday as having been withdrawn/deleted, is in fact under contract. There were two listings, one as land, one as residential, and the agent pulled one yesterday but the contract didn’t make the MLS until this morning. Last asking oprice was $2.2 million.

UPDATE: 10/1/09: Reported sold today for $1.8 million. Assessment: $3 million. Put that in your pipe and smoke it.

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Carl Icahn shows why he’s Carl Icahn

Bails out Realogy, for a steep price.

It looks like the fixer-upper that billionaire investor Leon Black bought in real estate company Realogy won’t be foreclosed on just yet.

The company behind such big names as Century 21, Coldwell Banker and Corcoran Group, came this close to defaulting on its senior debt, but thanks to a deal struck with billionaire Carl Icahn, Realogy was able to pay down its senior loans and give itself some breathing room.

Realogy this week said it raised $515 million in new loans, with Icahn representing 30 percent of that money. It plans to use $365 million of the proceeds to reduce senior debt.

The company’s senior debt had required that Realogy’s debt load be no more than five times its cash flow, but as of the end of June, the company was slightly above that threshold. What’s more, a weak housing market has cut into cash flow, making the need to pare down the senior portion all the more urgent.

Black’s Apollo Management bought Realogy in a highly leveraged, $7.7 billion buyout in April 2007, but the weak credit markets and the mortgage crisis have helped the company to stay afloat.

Icahn earlier this year bought $311 million in Realogy loans at roughly 40 cents on the dollar, and under the deal announced this week Icahn is selling $91 million of that back to Apollo at about double what he paid, according to a source familiar with the matter.

On top of that, Icahn is swapping $220 million of the junior debt he holds for $150 million of newly issued notes that are more secure and pay a higher interest rate.

Long-term, Realogy still faces problems. The debt-to-cash-flow ratio is tested every quarter, and starting in April 2011, the ratio falls from 5 to 4.75.

What’s more, Realogy has only cut its overall debt by $70 million, leaving it on the hook for $6.3 billion that now commands a higher interest rate.

Apollo and Icahn declined to comment. Realogy declined to comment beyond clarifying what was in publicly released financial statements.

From what I read elsewhere, the “senior debt” Realogy paid back was debt Icahn had bought for 0.40 on the dollar and repaid himself yesterday at 0.80. Nice work if you can get it.

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Oops!

New listing came on today at 110 Clapboard Ridge Road: 24,000 sq. feet, 5 + acres, pool, 7 bedrooms, etc. “House is under construction and being sold as is.”

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