uSears Shareholders Sue, Claim CEO Is Stripping Company For Partsr

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  (Pete Kraynak)

  For many years here at Consumerist, we developed a theory that the venerable department store Sears was secretly a vast anti-capitalist prank, which actively avoided selling merchandise. Its goal was something else: perhaps waiting for the retail real estate market to turn around and cash in the land and buildings that it owns. A group of Sears Holdings shareholders are starting to think the same thing, and they’ve filed a lawsuit against the company and its manifesto-writing CEO, Eddie Lampert.

  Specifically, the shareholders object to the sale of valuable stores that the company happens to own to real estate investment trusts. Two big store sales to REITs have been announced so far, and both are joint ventures with companies that own malls and other retail real estate. Current Sears shareholders will have the opportunity to invest in the real estate ventures, but the sale of the buildings doesn’t strike the shareholders who filed the lawsuit as a prudent business decision.

  The Chicago Tribune quotes the lawsuit, noting that the shareholders taking part believe that selling some buildings for $2.5 billion isn’t really going to help Sears Holdings. Remember that the company lost $1.7 billion last year, and that was considered an improvement.

  From the lawsuit:

  Sears and its stockholders would receive a severely inadequate cash payment that the defendant Lampert-controlled company may use to cover operating losses and debt obligations for another year or so, before stockholders are left holding the bag in an insolvency widely viewed as inevitable if the proposed transaction occurs.

  The shareholders seem to believe that in this scenario, Sears Holdings will inevitably fail. Its assets that are actually worth anything have been spun off into separate ventures, or sold to the real estate investment trusts. Once everything of value has been sold or spun off, Sears Holdings itself would have very little value, and these shareholders see its failure as “inevitable.”

  That’s just one scenario, though. It’s also possible that the cash infusion and renting out parts of their massive stores will be beneficial to Sears and Kmart, which will find their way in a changing retail environment and flourish as a multichannel merchant with a weird obsession with signing people up for its rewards program.

  Sears lawsuit alleges store sales to benefit CEO [Chicago Tribune]

  
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by Laura Northrup via Consumerist

uScammer Convinces Tourists To Pay $409 For Free Staten Island Ferry Ticketsr

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• It costs a lot of money driving into New York City through the Hudson River tunnels or over the George Washington Bridge, and subways and cabs certainly aren’t free. So you can’t fault tourists who assume they have to pay to ride the free Staten Island Ferry — but more than $200 per ticket?

  CBS2 in NYC reports that a Virginia couple were scammed out of $409 for two tickets on the ferry that connects lower Manhattan to Staten Island.

  The man was posing as a ticket agent in Battery Park, which adjoins the ferry terminal. Not only did he regularly scam people into paying for their free rides, he also conned some folks out of entrance fees to the public park.

  He claims to have raked in upwards of a few thousand dollars in a day, according to CBS2.

  Some critics say the city isn’t doing enough to crack down on this sort of very public bad behavior.

  “What’s really sad is that the city and the parks department have known about this for many years,” says Geoffrey Croft, president of New York City Park Advocates. “We have an open air scalpers market. These people have no licenses.”

  This news comes on the heels of reports of a hot dog vendor working near the Ground Zero site in lower Manhattan who was trying to charge $20-30 for a simple hot dog.

  
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by Chris Morran via Consumerist

uIHOP Changes Logo For First Time In 20 Years Because The Old Version Was Too Frownyr

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• In a move that literally turns a frown upside down, IHOP has changed its logo for the first time in 20 years. Partly because the old version used a red swoop that was just a bit too sad.

  The company found that the red banner “appeared as a person’s frown,” its Vice President of Marketing Kirk Thompson told BuzzFeed News.

  That’s not the kind of negative attitude that guests want with their pancakes, he says, echoing statements in the company’s official press release.

  “Our guests have told us for many years that coming to IHOP, and in many cases just thinking about our world famous pancakes, makes them smile,” he says in the statement. “We believe this new logo captures the essence of the IHOP experience, which consistently delivers our guests not only craveable food, but also great memories shared with family and friends.”

  The new logo will be prominently featured on the IHOP menu, website, mobile app and in advertising signage at select restaurants.

  IHOP Changed Its Logo For The First Time In 20 Years [Buzzfeed News]

  
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by Mary Beth Quirk via Consumerist

uTakata Plans To Stop Using Ammonium Nitrate, Phase Out Certain Airbag Inflatorsr

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• A day before representatives from Japanese auto parts maker Takata are set to appear in front of the House Energy and Commerce subcommittee to discuss the more than 34 million defective airbags linked to six deaths and more than a hundred injuries, the company announced it would stop using an often volatile chemical in its safety devices moving forward and call back some airbags replaced during earlier recalls.

  The Detroit News reports that Takata is also expected to notify legislators and regulators that it plans to recall some driver-side airbag inflators that have previously been replaced and halt production of a certain type of airbag.

  Calling back airbags that have already been replaced gives credence to consumer advocates’ worries over the safety of Takata’s replacement airbags, given that the company – along with investigators for the National Highway Traffic Safety Administration and automakers – have yet to find a root cause for the airbag ruptures.

  According to remarks [PDF] prepared by Takata executive Kevin Kennedy, the company is taking steps to ensure that newly replaced airbags are safe.

  “We are working with our automaker partners to transition to newer versions of driver inflators in our replacement kits or inflators made by other suppliers that do not contain ammonium nitrate propellant,” explains Kennedy.

  The unusual chemical has been a topic of discussion among regulators and investigators trying to determine why the Takata-produced airbags have a tendency to shoot shrapnel upon deployment.

  Back in October, investigators began to focus on the unusual explosive chemical – ammonium nitrate – used in Takata’s airbags.

  Chemicals have long been the powerful mechanism behind airbags. That’s why after some crashes, the driver or front-seat passenger in a vehicle may have chemical burns on their skin.

  Typically the inside of an airbag contains an igniter that heats an aspirin-sized tablet of compressed chemical. The ensuing reaction fills the airbag with gas, inflating it at speeds reaching a few hundred miles per hour.

  Takata began using ammonium nitrate in its airbags in the late 1990s, because of the chemical’s ability to make airbags inflate in a matter of milliseconds.

  Since the company began making replacement parts for the recalled vehicles, it claims to have added materials that gather and hold moisture to the chemical mix in an effort to make the device safer.

  In addition to phasing out the use of ammonium nitrate, Kennedy is expected to detail the parts maker’s next steps with regard to its history-making recall.

  “The final stage of the recalls will include the replacement of batwing driver inflators that were previously installed as remedy parts in prior recalls,” the testimony states. “Takata has also committed to cease producing these types of driver inflators.”

  The Detroit News reports that in all six cases of ruptures that resulted in fatalities, the driver-side airbag included the batwing inflators.

  Still, Kennedy says in the prepared testimony that the 67 reported cases of ruptures including that specific inflator “represent approximately… fewer than 9 failures out of every 100,000 deployments.”

  As for passenger-side airbag ruptures, Takata say there have been no cases involving fatalities and only 21 actual reports of ruptures. However, company plans to recall one type of passenger inflator.

  In addition to changing its chemical component and ceasing production of one inflator type, Takata says it is working on developing a proactive advertising campaign to reach a greater number of vehicle owners and “help ensure that the recall fulfillment rates will be as high as possible.”

  Despite Takata’s recent efforts to remedy the massive airbag debacle, the head of the auto trade association is expected to endorse NHTSA’s plans to use its authority to take a hands-on approach to overseeing the recall and its fix, the Detroit News reports.

  “A clear, unified approach to the recall and remedy process is the most effective way to minimize owner confusion and improve participation rates for this recall,” Mitch Bainwol, CEO for the Alliance of Automobile Manufacturers, says in prepared testimony [PDF]. “It is also important that NHTSA continue to have a prominent voice among its international counterparts, given the global nature of this recall.”

  Takata to phase out, replace some air bags [The Detroit News]

  
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by Ashlee Kieler via Consumerist

uReport: TSA Agents Failed 67 Out Of 70 Undercover Testsr

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  (JessicaKRoach)

  You can probably remember a time when you’ve been held up during the airport security screening process by something as innocent as forgotten bottle of lotion or an electric toothbrush. But while Transportation Security Administration agents seem to do fine catching things they don’t need to, a recent internal investigation into the agency found otherwise when it came to catching potentially dangerous items.

  TSA agents failed 67 out of 70 tests run by undercover investigators with the Department of Homeland Security, where DHS agents were able to smuggle fake explosives or banned weapons through checkpoints, ABC News reports, citing officials briefed on the results of a recent Homeland Security Inspector General’s report.

  “Red Team” agents, as they’re known, posed as passengers to try and beat the system, which they managed to do 95% of the time. In one case, an undercover agent was held up when he set off an alarm, but TSA screeners then failed to find a fake explosive device taped to his back during a pat down.

  Homeland Security Secretary Jeh Johnson sought a detailed briefing on the results last week at TSA headquarters, sources say.

  “Upon learning the initial findings of the Office of Inspector General’s report, Secretary Johnson immediately directed TSA to implement a series of actions, several of which are now in place, to address the issues raised in the report,” the DHS said in a written statement to ABC News.

  Officials say security at the country’s airports is multi-layered and strong, but that the latest results were disappointing nevertheless, according to insiders cited by ABC.

  You might recall a similar incident in 2013, when an undercover TSA agent made it through security at Newark Airport with an explosive device stuffed down his pants.

  Back then, the TSA issued a statement that this kind of testing was normal.

  “TSA regularly conducts covert testing of security layers. Regardless of the tests’ outcome, TSA officers are provided with immediate on-the-spot feedback so they receive the maximum training value that the drills offer,” a statement said. “Due to the security-sensitive nature of the tests, TSA does not publicly share details about how they are conducted, what specifically is tested or the outcomes.”

  EXCLUSIVE: Undercover DHS Tests Find Security Failures at US Airports [ABC News]

  
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by Mary Beth Quirk via Consumerist

uBurger King’s Fantastically Creepy King Mascot Is Backr

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• Have you been counting the days until Burger King’s terribly creepy “King” mascot re-appeared in the brand’s ads? It seems unlikely that any potential customers missed the King, and he’s possibly been slumming behind the counter of a Taco Bell since his spots stopped airing in 2011. Here’s your warning: the King is coming back to your television. Sorry.

  Our readers declared the perpetually smiling, plastic-faced King to be the second creepiest fast food mascot of all time in a poll just over a year ago so maybe it was us who guaranteed his return. Bringing back the King doesn’t just mean he quits working for other fast-food joints: it means that his re-appearance earns the chain free publicity from sites like…well, Consumerist. We’ll probably even embed the YouTube version of the 15-second ad, earning them free views.

  You also would have had some advance warning that this mascot wasn’t dead if you watched the recent Floyd Mayweather-Manny Pacquiao boxing match, where Burger King sponsored Mayweather and even joined his entourage before the match. That’s probably some kind of royal protocol breach, but at least the King was appropriately dressed.

  Burger King Unveils Its First TV Commercial With the King in More Than 4 Years [AdWeek]

  
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by Laura Northrup via Consumerist

uFoster Farms, Company Behind Salmonella Outbreak, To Cut Down On Antibiotics It Shoves Down Chickens’ Throatsr

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  (RW Sinclair)
  

  Foster Farms is one of the country’s largest poultry, cranking out millions of birds each week. It’s also the company behind a recent outbreak of drug-resistant salmonella that sickened more than 600 people in 29 states. Today, the company has changed its antibiotics policies so that its chickens will no longer be fed medically unnecessary drugs.

  Repeated low-dose use of antibiotics can result in bigger livestock, giving farmers more beef/pork/poultry for their buck. Unfortunately, it also encourages the development of pathogens that are resistant to these drugs. This is especially bad when those drugs are medically important to human beings.

  For several months in 2013, Foster Farms was putting out chickens that passed USDA inspection but nonetheless were tainted with a potent, drug-resistant strain of salmonella. In fact, at three plants, around 25% of chicken parts tested positive for the bacteria during the outbreak.

  Since most antibiotics fed to livestock — which accounts for around 80% of all antibiotics sold in the U.S. — are given either to promote tissue growth or for prophylactic disease prevention because of the foul conditions of some farms, many scientists and public health advocates have called for an end to the use of important antibiotics, except to treat a diagnosed disease.

  In recent years, several big names in poultry have made commitments to curbing antibiotic use. First, Tyson announced an end to using the drugs in its hatcheries before subsequently expanding that to phase out medically important antibiotics for its entire flock by Sept. 2017. Perdue has also stopped using these drugs in its hatcheries.

  Some of the biggest buyers of chicken have also made changes to their antibiotics requirements. McDonald’s says it will only source chickens raised without the drugs, while Chick fil-A is currently in a phase-out process for buying drugged-up birds. Walmart recently disappointed advocates by demanding more transparency from meat suppliers, but not requiring antibiotic-free animals for the meat sold in its stores.

  In advance of a White House conference on antibiotics tomorrow, Foster Farms has announced that in the last year it has tripled the number of chickens raised without antibiotics. Granted, the company doesn’t say how many drug-free chickens it used as a base number for that calculation.

  Additionally, the company says it has eliminated the use of all antibiotics deemed by the USDA to be “critical” to human health. Foster has plans to eliminate all medically important antibiotics but is not giving a timeline for when it intends to reach that goal.

  Foster Farms claims that its antibiotics policies will be audited by for compliance by an independent reviewer.

  The announcement is being greeted with cautious optimism by public health advocates.

  Steven Roach, senior analyst at Keep Antibiotics Working says that even though Foster’s announcement is not as far-reaching as the commitments made by Perdue or Tyson, it’s a step in the right direction.

  “We urge Foster Farms to make this move transparently by ensuring that its future use of antibiotics in flocks be publicly reported, both in terms of the reasons for use and the amounts, and by releasing the results of its third party audits,” explains Roach, who says that Foster could “demonstrate even greater leadership by being the first company to take similar steps in its turkey production.”

  Jonathan Kaplan at the Natural Resources Defense Council expressed some concern about the lack of a timeline for eliminating all important antibiotics from Foster’s chicken feed.

  “By contrast, Perdue reports that it has already eliminated these drugs in 95% of its flock; Tyson says it will meet that goal by March of 2017,” he writes. “[E]nsuring veterinary oversight, a prohibition on growth promotion uses, and a ban of ‘critically important’ antibiotics are all good measures, but still leave the door open for routine use of other antibiotics. So Foster Farm’s commitment today to work at eliminating all uses of medically important antibiotics is key. We’d feel better if it came with an end-date, specific milestones to measure progress, and more transparency about current and future drug use.”

  
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by Chris Morran via Consumerist