PhillyDeals: Horsham's Capmark gets Buffett behind it


By Joseph N. DiStefano

Canny investor Warren Buffett, whose stock in his insurance-based holding company, Berkshire Hathaway Inc., has made him the world's richest investor, is riding to the rescue of a Horsham lender - and it will pay him millions of dollars for the privilege of being saved.

Capmark Financial Group Inc., the former General Motors loan subsidiary crippled by the credit-market collapse of 2007, has agreed to sell its mortgage-banking and servicing businesses to a partnership between Berkshire Hathaway, of Omaha, Neb., and insurance investor Leucadia National Corp., of New York, in a complex, conditional deal.

Capmark agreed to pay $40 million for the right to guarantee that Berkshire's and Leucadia's Berkadia L.L.C. will buy Capmark for up to $490 million if Capmark decides to sell in the next 60 days.

Berkadia would pay $375 million cash, and part or all of the remaining $115 million may be kept by the buyers to pay losses and costs, depending on what kind of shape Capmark is in when the deal closes.

The deal leaves room for a better offer if Capmark files for bankruptcy protection.

Capmark employs about 600 at its Montgomery County headquarters.


McCord backpedals

Fat fee increases for Pennsylvania's 529 Guaranteed Savings Plan have been pushed back to Sept. 12, state Treasurer Rob McCord said this week on his Web site.

McCord, elected in the fall, seems to have a "good news only" policy for his announcements: He didn't post any statement when he imposed higher fees on savers - the households investing for their children's future college tuitions - last month.

The Inquirer reported the increase in this space Aug. 23 after outraged Pennsylvania parents, who had believed the state's guarantee promise, were informed of the new charges by state mail and e-mail and brought the higher fees to my attention.

Some families that dutifully put aside money for their children's education through the program will be socked by unexpected fees of more than $1,500 a year as a result of the increase. Or they can apply to transfer the tax-exempt money to another of the dozens of U.S. 529 plans, most of which aren't "guaranteed."

Did parent and voter outrage persuade McCord to delay the fee increase a little? "We have been getting feedback," Treasury spokeswoman Carrie Fischer Lepore said.

Some parents weren't getting notice of the increases in time to do anything about it. "We wanted to let families take advantage of lower tuition rates and premiums" before the increases take effect, Lepore said.

McCord raised the fees because of a situation he inherited: The state's hired investment managers lost as much as $400 million when markets fell last year. They've regained part of the loss, but McCord felt - as previous treasurers felt in similar circumstances - that it's best to boost assets to make sure there'll be enough money to pay when the time comes.

As I noted in Sunday's column, some of the 529 plan managers have given money to McCord and other state officials for their political campaigns.

The Securities and Exchange Commission wants to stop such donations, with a proposal that would bar states and towns from paying firms that gave money to politicians in the previous two years.

McCord's move may foreshadow attempts to freeze some of Pennsylvania's 3,000-plus taxpayer-funded municipal- and state-worker pension plans, and replace them with plans funded mostly by worker contributions, under proposals being debated in the General Assembly.


Treasury cuts

McCord yesterday laid off 60 people, from his staff of 490, because of state budget cuts.

A big drop in income tax receipts and a summer-long fight between Gov. Rendell, who wants to raise taxes, and state Senate Republican leaders, who want to cut programs that Democrats like, have put pressure on state agencies to cut more jobs. Treasury had to cut its budget 15 percent, spokeswoman Lepore told me.