So, I’m certain they would have negotiated hard not to indemnify Penney. Perhaps they even balked at providing the absolutely routine seller’s warranties and representations that no other contracts or obligations prevented them from entering into the Penney contract. In fact, maybe they even tried to have Penney indemnify them. That, of course, should have been a giveaway to the Penney side that this deal could be big trouble, just as it should be the best evidence at the trial that Martha and her team knew they were doing something wrong. On the other hand, if Penney and its lawyers yielded on these issues, it would mean they were colossally clueless or so desperate to strike a deal that they ignored the inevitable consequences.
In short, for me, the negotiation over the indemnity clause and the warranties and representations could be the most interesting part of this story — a tale of who’s dumb and who’s dumber.
Ron Johnson, the former head of Apple’s retail operation whom JC Penney hired as CEO at the end of 2011, has already become a Wall Street piñata for having made a slew of strategic pricing and marketing decisions that have nearly tanked his company. In addition to all that, it’s now clear that he made a deal with Martha Stewart that so obviously flouted a contract that it was destined to end up in court. What were he and his lawyers thinking? The indemnities and warranties and representations clauses and the negotiation over them will tell that story.
3. Union boss, Mexican-style:
This story on Quartz.com, the smart new digital-only daily business report, deserves follow-up by broader news outlets. It’s about Elba Esther Gordillo, who has just been jailed in Mexico for alleged embezzlement.
According to Quartz, Gordillo is:
the head of the Mexican teachers’ union, which, with 1.5 million members, is the largest union in Latin America. She used union contributions of Mexican teachers to become a millionaire who flew in private jets, owned two mansions in San Diego, California, and spent $3 million shopping in Neiman Marcus alone. She and her allies had other sources of income, though. She turned the union’s control over all teaching positions in the country into a private ownership system—ownership meaning that union bosses could inherit, bequeath, sell or rent these positions to other people.
Other news outlets, including the Guardian and Huffington Post, have run stories about her, but there are lots of good angles still to be explored. For example, what does Dennis Van Roekel, the hard-line president of the National Education Association, America’s largest teachers’ union, have to say about Gordillo and her arrest? What dealings have the two leaders and their unions had, if any?
What about Randi Weingarten, the less-hard-line head of the smaller American Federation of Teachers? Both unions in the past have preached international solidarity. Did Gordillo and her alleged wrongdoing make them back off when it came to Mexico?
This story also makes me curious about the general political standing and challenges faced by unions and their leaders in developing countries and in countries, such as those in Europe, where traditional union perquisites are now under such heavy challenge.
Beyond that, if I were still writing about education reform in the United States and spending time with Weingarten, I’d love to ask her why she never tried to put me on to Gordillo and Mexico to make herself look good and her tough stance on union rights look moderate by comparison. As in, “If you think I’m bad, take a look south of the border.”
More in Behind the NewsRead More »