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Opera accused of offering predatory loans through Android apps (updated)
Opera has frequently tried to claim the moral high ground in the web browser world, but it's being accused of using its side projects for far less virtuous behavior. Hindenburg Research has published a report alleging that Opera is running four Android apps aimed at India, Kenya and Nigeria (CashBean, OKash, OPay and OPesa) that appear to be in direct violation of Google Play Store policies forbidding predatory loans and deceptive descriptions. The apps would claim to offer maximum annual percentage rate (APR) of 33 percent or less, but the actual rates were much higher, climbing to 438 percent in the case of OPesa. And while they publicly offered reasonable loan terms of 91 to 365 days, the real length was no more than 29 days (for OKash) and more often 15 days -- well under Google's 60-day minimum.
Uber's next business idea: Lending money to drivers
Uber is reportedly looking into offering loans directly to drivers, according to a report from Recode. The ride sharing company recently sent out an in-app survey to some drivers that indicated the company is starting to build a "new financial product" designed to help Uber drivers "in a time of need." The survey contained a number of questions regarding the driver's previous use and future interest in loans.
Theranos avoids bankruptcy thanks to a last-minute loan
Theranos has come a long way from the days when it was a darling in the biotech industry. The Wall Street Journal's sources have claimed that the blood-testing firm has avoided bankruptcy by securing a $100 million loan from Fortress Investment Group. The move should keep Theranos afloat "through 2018," founder Elizabeth Holmes reportedly said in an email. Naturally, though, there are strings attached -- Fortress wants to see a return on its investment.
Curt Schilling's defunct game studio won't face criminal charges
Curt Schilling's 38 Studios has run into plenty of trouble since declaring bankruptcy in 2012, not the least of which is an SEC lawsuit this year. However, criminal cases won't be contributing to its headaches. The Rhode Island State Police have determined that they won't file charges over the failed $75 million loan for Project Copernicus, the massively multiplayer online game that was to have followed Kingdoms of Amalur: Reckoning. There were "no provable criminal violations" in the way the developer secured its cash, the police say. The decision isn't completely shocking (federal officials decided against charges back in 2012), but it eliminates what chances were left of staff facing prison time.
Amazon UK begins offering loans for pricier purchases
In a bid to put an even bigger squeeze on its brick-and-mortar competition, Amazon is now offering its customers instalment plans to help them buy the more expensive items on its website. According to The Guardian, Brits can now select Amazon's Pay Monthly option at the checkout, letting them pay for orders totalling more than £400 over a series of instalments. These loans, which are only provided once a customer passes an online credit check, can be spread over two, three or four years depending on the order amount and are charged at a current interest rate of 16.9 percent.
For drivers with bad credit, new cars come with a kill switch
Driving a car off a lot usually comes with a sense of exhilaration or freedom, but that thrill is short-lived when you've got a debt collector riding shotgun wherever you go. That's basically the case for a whole host of Americans with bad credit -- in use since the 90s, the New York Times reports that now some 2 million cars in the United States are outfitted with remote kill switches that shut cars down if their owners fall behind on payments. The system is simple enough: once installed, the so-called starter interrupt will sit in place and beep to notify drivers that their payments are coming up. Once delinquent drivers tiptoe past a certain threshold (which seems to vary by lender and state), some account manager somewhere hits a button and voilà -- that motor won't purr until someone pays.
T-Mobile Test Drive lets you borrow an iPhone 5s for a week
T-Mobile clearly wants you to become a customer -- the company's "UnCarrier 5.0" move will get you an iPhone 5s to try out for a full seven days. At an event in Seattle today, the carrier introduced Test Drive, a service that will help customers avoid "buying blind," giving you an opportunity to experience LTE at home before you commit to making a purchase. The service launches this Sunday and lets you borrow Apple's latest handset for a week, at which point you'll need to return the device to any T-Mobile store, even if you plan on signing up and purchasing a device.
SEC subpoenas the Rhode Island Commerce Corporation over 38 Studios lawsuit
After the last bit of immature name-calling over the 38 Studios debacle, it must be nice to finally put this whole mess to bed for good so we can... oh, wait. No, it appears that the drama regarding the dead studio continues as the Securities & Exchange Commission has issued a subpoena for the Rhode Island Commerce Corporation regarding its lawsuit against Curt Schilling and the other executives of 38 Studios pre-closure. The subpoenas request both depositions and exhibits pertaining to the ongoing court case against the management of the former studio. The RICC, formerly known as the Economic Development Corporation, was the organization responsible for selling bonds to facilitate the $75 million loan to the now-defunct gaming studio and has been under investigation by the SEC following the company's bankruptcy and dissolution. Neither the SEC nor the RICC is discussing any further details regarding the investigation.
Tesla Motors repays Department of Energy loan nine years early
With a wire transfer of $451.8 million, Elon Musk has finally made good on his promise to repay the hefty loan Tesla received from the Department of Energy well ahead of its 2022 due date, beating even Musk's own five-year estimate. This comes on the heels of a very profitable first quarter, and is yet another sign the electric car maker is doing quite well on the greener side of things, despite a touch of bad press earlier this year. For more on what Tesla has to say about this milestone, check the press release after the break.
Department of Energy seizes $21 million reserve account from Fisker
Fisker just can't catch a break. As if enduring the layoffs of three out of every four employees and the resignation of its founder wasn't unsettling enough, it's now come to light that the Department of Energy recently confiscated the company's $21 million reserve account in an attempt to recoup some of the government's loan. Fisker's first payment on the $192 million federal loan was due Monday, but the Energy Department revealed that it actually took the money 12 days beforehand, simply due to the company's high risk of default -- a move it characterized as an "appropriate action on behalf of taxpayers." If you're thinking the writing's now on the wall, you're correct... the WSJ reports that Fisker has hired a bankruptcy attorney, and the company admits that it's actively in search of a new owner. Will luck swing in Fisker's favor next time around? Place your bets.
Rhode Island attempting to default on 38 Studios' debt
The AP is reporting that Rhode Island is attempting to default on the debt it owes for 38 Studios' $75 million loan and subsequent bankruptcy. The state has a proposal before lawmakers that would keep it from having to make any payments to bond holders. Supporters of the move to default say that the insurance company will compensate bond holders, while the EDC, which approved the loan, says that defaulting will hurt future project and bond ratings. One lawmaker and default proponent, Rep. Charlene Lima, said that the 38 Studios fiasco harmed the reputation of the state and constricted its future economic development. The proposal is being opposed by Governor Lincoln Chafee, who wants to see the debt repaid.
Elon Musk says Tesla will repay Department of Energy loan well before 2022 due date
Tesla's CEO, Elon Musk, has been the focus of many headlines lately due to a certain, well-documented kerfuffle with The New York Times. Today, however, the automotive company's chief isn't questioning any reviews. Instead, he's taken to the Advanced Research Projects Agency for Energy summit to share his belief that Tesla Motors will pay off that $465 million loan from the US Department of Energy well ahead of when it's expected to -- in five years, rather than ten, to be precise. Musk's comments shouldn't come as a surprise, however, given that the Model S maker has been paying its DOE-borrowed cash on time and before the deadlines -- something it's been able to accomplish despite being far from a money-making machine at the moment. For the Department of Energy, meanwhile, this all sounds like music to the ears, especially since it knows that not all EVs always work out as planned.
Rhode Island EDC sues Curt Schilling and more over 38 Studios loan
Back in May, Project Copernicus developer 38 Studios became embroiled in the controversy of the year when the studio officially shut down and fired all 379 of its employees. The story quickly turned political as the studio had been granted a loan of $75m US by the state of Rhode Island and it became known that the tax-paying public could be hit for an estimated $150.7m US due to the studio's closure. The story of mishandled taxpayer money has played a big part in the politics of Rhode Island. Today that story developed further as the Rhode Island Economic Development Corporation (EDC), which granted the original loan and may therefore be responsible for the public debt, filed a lawsuit against the people who created the deal. The defendants named in the case include 38 Studios founder Curt Schilling, CEO Jennifer McLean, former EDC executive director Keith Stokes, Wells Fargo Securities and even Barclays Capital. Rhode Island Governor Lincoln Chafee released a public statement about the lawsuit on YouTube.
Sharp takes out $4.6 billion loan while it continues restructuring
Much of the business news out of Japan from Sharp hasn't been good, but for now at least it's worked out a loan agreement to keep rolling. It's still pursuing a deal with manufacturer Hon Hai Precision Industry / Foxconn that would provide a much-needed injection of capital, but those talks have reportedly stalled. Until something happens there it has a 360 billion yen ($4.6 billion) syndicated loan worked out with a couple of Japanese banks that runs until June 30th 2013. We're still not sure how Sharp will proceed with all this, but hopefully an agreement can be reached that brings its sweet IGZO LCD tech and any other new screens it will be showing off at CEATEC next week to more devices.
Subpoenas issued over 38 Studios deal, Citizens Bank sues Schilling [Updated]
While the fallout from 38 Studios' collapse carries with it a human toll, it also has triggered a legal one as well. State and federal law enforcement agencies have issued subpoenas to both Bank Rhode Island and the Rhode Island Economic Development Corporation over the loans that enticed the game studio to the state. Currently, the RI state police, the state attorney general's office, the FBI, and the US attorney's office are jointly looking into the situation. Police are investigating the specifics of the deals in an attempt to figure out what exactly happened. The subpoenas requested records of the financial contracts and loans. Both the RIEDC's $75M in taxpayer bonds and Bank Rhode Island's $8.5M loan are unlikely to be repaid following the studio's bankruptcy. [Update: Massively reader Zaken tipped us off to the fact that Citizens Bank has announced it is suing 38 Studios' Curt Schilling to the tune of $2.4 million "in an attempt to recoup its money from the ex-ballplayer's personal assets."]
38 Studios' Project Copernicus to release in June 2013, says RI governor
It is not every day that a U.S. governor is the one to announce the launch window for an MMO, so savor the weirdness while you can: Rhode Island Governor Lincoln Chafee announced at a press conference that 38 Studios will be releasing code-name Project Copernicus next summer. "What I understand is Copernicus is June of '13," Chafee said. He also stated that he thought the financial deal was a "risky enterprise" from the start. 38 Studios Founder and Chairman Curt Schilling said on Facebook that rumors of his using the state funds to repay his personal investment in the company was "not true." In a separate post, Schilling attempted to set an optimistic tone: "We will find a way, and the strength, to endure." We have been following the financial turmoil that 38 Studios is in following its default on paying back Rhode Island for its $75 million loan. The studio and state are looking for options, but in the meanwhile, 38 Studios has been struggling to make payments by holding back employee paychecks and seeking additional capital from private investors.
38 Studios paying state back by not paying employees
If you're familiar with the phrase "robbing Peter to pay Paul," you'll understand the latest episode in the ongoing 38 Studios financial crisis. Except replace "Paul" with "the state of Rhode Island" and "Peter" with "the company's employees." Yes, in order to make the most recent payment to the state that sparked this whole crisis, the Rhode Island Economic Development Corporation has been informed that Curt Schilling's company is paying the state but not paying any of the company's employees. According to anonymous sources, all temporary employees and contractors have also been terminated. While this measure might help forestall immediate action, the company is still on the hook for a $75 million loan, and Rhode Island governor Lincoln Chafee has made it clear that the company is looking for more assistance from the state in order to remain viable. 38 Studios continues to make no public statements at this time. We'll no doubt have more on this story in the coming days as it continues to develop.
Kodak gets court approval to borrow $950 million, end theater sponsorship
Kodak took another step along the road to recovery yesterday, after receiving court approval to borrow $950 million in restructuring funds. Nearly a month after the camera maker filed for Chapter 11 bankruptcy, US Bankruptcy Judge Allen Gropper granted Kodak's request on Thursday, allowing the company to continue operations during its ongoing transition. Gropper's decision, handed down in a Manhattan court, follows a series of negotiations between Kodak and its lenders, and adds an extra $300 million to the $650 million awarded during January's Chapter 11 filing. The company is also allowed to end its sponsorship of the Kodak Theatre in Los Angeles, after successfully arguing that doing so would be in the best interest of Kodak and its creditors. Under the deal, Kodak is obliged to pay $72 million over the course of 20 years. It currently shells out $3.6 million per year and still has $38 million in outstanding payments, but Kodak's lawyers argued that the agreement was too costly. Kodak Chairman and CEO Antonio Perez issued the following statement in response to yesterday's decision: "Today's agreement is another step towards ensuring that Kodak is positioned to execute on the goals the Company set out last month: Bolster our liquidity in the U.S. and abroad, monetize our non-strategic intellectual property, fairly resolve legacy liabilities, and enable Kodak to focus on its most valuable business lines."
Sony's 3D Library lets Aussies borrow products free of charge
Sony's push for three dimensional entertainment has inspired it to launch a series of product-loaning machines in the land of Oz. These "3D Library" kiosks, as the manufacturer is simply dubbing 'em, will let Aussies checkout a variety of Sony's 3D-capable products at no cost and for up to three days. Folks itching to create some 3D content for free can choose from the Handycam HDR-TD10, NEX C3 and Bloggie cameras. And, as if hardware wasn't enough, you'll be surprised to hear the company's also throwing in its own flicks and PlayStation games as part of its loaner campaign. The program is underway now, so all you Australians willing to take Sony up on its offer can hit up the PR below to find the nearest freeloading location.
With federal loans blocked, Fisker halts work on Project Nina, lays off 66 workers
Fisker Automotive's bumpy 2011 appears to have given way to an even rockier 2012. A little more than a month after recalling 239 of its Karma plug-ins, Fisker has now stopped working on its second electric vehicle, following the US government's decision to suspend its federal loans. The manufacturer confirmed the news in an email yesterday, adding that a total of 66 workers in Delaware and California have been laid off, as a result. In 2009, the Department of Energy provided Fisker with $528.7 million in federal loans, but according to spokesman Roger Ormisher, access to those funds have been blocked since May. The money was supposed to be used to launch the Karma and Fisker's second, US-manufactured EV, known as the Nina. The Karma began rolling out to market in July, but did so well behind schedule, spurring the DOE to suspend its loan."Our loan guarantees have strict conditions in place to protect taxpayers," Department spokesman Damien LaVera explained in an email to Bloomberg. "The department only allows the loan to be disbursed as the company meets certain milestones and demonstrates results." Thus far, Fisker has drawn on only $193 million of federal funds and is looking to renegotiate the terms of the loan, in the hopes of accessing the remaining $336 million. The DOE, however, is still under intense scrutiny because of September's Solyndra debacle, so it's difficult to say what a renegotiated deal would look like. The manufacturer, for its part, says it's taking no risks, telling GigaOM that it "continues to pursue alternative funding sources." In the meantime, it'll continue to focus on the Karma for 2012, and hopes to revive Project Nina at a later date.