Short Interests: tips, trends, observations

It’s Pullman’s thing

“Fight the Power” didn’t work last week in a Los Angeles courtroom when a federal bankruptcy judge picked the Pullman Group LLC show-biz bond juggernaut to add rhythm and blues legend Isley Brothers to its list of offerings for $4.8 million.

The case involved Ronald Isley, who owes the Internal Revenue Service $5 million or so. His chief asset is a third of the catalog of the 200-odd songs he and brothers Rudolph and O’Kelly wrote, and now Pullman will issue bonds backed by the songs to pay off the feds and other creditors who forced him into bankruptcy. Proprietor David Pullman has done the same thing, you may recall, for David Bowie, Ashford & Simpson and James Brown.

Loser in the deal was blue-eyed soul singer Michael Bolton, who offered $5.3 million that Judge Kathleen March called “illusory.” Anyway, Mr. Bolton plans to appeal a jury decision that he owes the Isleys $5.4 million for stealing parts of their 1961 song, “Love is a Wonderful Thing.” It’s enough to make you twist and shout.

Default, Brutus, in the stars

Even bond analysts need to entertain themselves.

The junk bond team at Merrill Lynch & Co. Inc. reports that the shop is only a quarter of the way through its default competition and already 11 issues have defaulted. It’s a trend; last year, Standard & Poor’s reports, defaults more than doubled to 104.

The game works like this: Analysts each pick 50 high-yield issues and assess the likelihood of each one’s going belly-up, from 1 (most likely to default) to 50 (least likely). It’s like golf, of course: The lowest score wins. The front-runner so far has a score of 3, meaning he or she — Merrill won’t reveal the names of the 27 contestants until the race is over — can really ferret out a stinker.

Lest you think these roaring times wouldn’t lend themselves to such a contest, the Merrill crew thinks differently. “We have no lingering fear of realizing our worst-case scenario, namely, too few companies coming a cropper to make the game interesting,” the analysts write in a recent update. “Corporate managers have been most gracious in obliging us.”

Running to London

In the movies, people run for their lives, but at J.G. Wentworth, a Philadelphia factor — it bundles and sells high-end receivables — employees run for their jobs. Well, at least for their travel time.

Thirty of them will work up more of a sweat than the Merrill analysts as they go on a six-day company-paid trip to Blighty in April to compete in the London Marathon. “Running is the most effective corporate training program we have,” says Michael Goodman, executive vice president. “It promotes healthy living,” he explains, “It promotes teamwork. And it provides a common goal with an uncommon reward.”

Mr. Goodman ought to know: He’s a four-time marathoner under the program, which is only in its second year. To get the free ride to the long run, workers must rack up 120 points within seven months, earned at the rate of 3 for a five-kilometer race, 6 for a 10K and 13 for a half-marathon. So far, Wentworth workers have run in the New York, Los Angeles, Vermont, Adirondack and (in Duluth, Minn.) Grandma’s marathons. Now there’s a run that seems made for leap year.