Letters: The Financial Future of Veterinarians

The Financial Future of Veterinarians

To the Editor:

“The Vet Debt Trap” (Feb. 24), about the veterinary student debt crisis, hit the nail on the head. It should be required reading for all prospective veterinary students, regardless of age, to temper their passionate pursuit of the profession with a sobering dose of financial realism before they commit.

I am a 28-year veteran of the profession. My demographic of private-practice owners will also suffer the consequences of this vicious debt cycle, since the eventual sale proceeds of our practices represent a significant portion of our potential retirement nest egg. Good luck finding a qualified buyer among our debt-ridden younger colleagues in the next 5 to 10 years and beyond, especially in the face of falling practice revenue. Some newly minted veterinarians won’t be able to qualify for a home mortgage, let alone the financing to buy a practice.

JEFFREY T. KRYSINSKI, D.V.M.

Grosse Pointe, Mich., Feb. 24

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To the Editor:

The article shed light on a subject that is hugely overlooked and underreported.  Before I applied to veterinary school, it was my understanding that there was a lack of veterinarians, especially in large-animal practice. Now I face the challenge of paying off student debt when jobs are few and far between.

I will most likely have to take an internship that may pay about $26,000 a year — $13 an hour for a 40-hour week, working 50 weeks a year. Considering that an intern may work 60 to 70 hours a week, that’s about $8 an hour. I made more money when I worked shoveling horse manure.

 I entered veterinary school with the best intentions — I love animals and can’t imagine a career that would make me happier. We are all young, starry-eyed animal lovers with dreams of saving lives; we are not accountants or business people. I hope that veterinary schools, the government and, most important, our future clients will take into account the sacrifices we make to live our dreams.

LAUREN PETERSON

Baton Rouge, La., Feb. 26

The writer is a third-year veterinary student at Louisiana State University.

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To the Editor:

I bought my veterinary practice in 2005, just two years out of school.  And while the economy in my area has not been kind to veterinary practices, I am still here.

But I have seen a change in the face of veterinary medicine, as more pet owners want low-cost, online, do-it-yourself medicine for their pets.  Sometimes I foresee the field becoming a trade, rather than a profession — even as so many veterinarians have student loans to deal with.

It’s hard to compete, and I have had to resort to coupons and lowering my own costs to get business in the door.  I hope that it will be enough to finish paying off my loans.

ANDREA MAYBERRY, D.V.M.

Grove City, Ohio, Feb. 25

The writer is owner of Grove City Veterinary Hospital.

Letters for Sunday Business may be sent to sunbiz@nytimes.com.

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Bits Blog: Judge Slashes Jury Award in Apple-Samsung Case

A federal judge on Friday significantly lessened the blow from Apple’s legal victory in a patent case against Samsung, lopping more than 40 percent off the damages a jury awarded Apple last year.

In her review of the jury’s decisions, which originally awarded Apple more than $1 billion for patent violations by Samsung in its mobile products, Judge Lucy Koh of the United States District Court in San Jose, Calif., knocked those damages down by $450 million, to $599 million.

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Groupon Says It Ousted Chief Executive

CHICAGO (AP) — Struggling online deals pioneer Groupon said Thursday that it ousted founder and CEO Andrew Mason amid worries that people are tiring of the myriad of online restaurant, spa and Botox deals that Groupon built its business on.

Shares jumped following Thursday's announcement, which had been anticipated for months. Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis were appointed to the Office of the Chief Executive while a replacement is found.

"Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future," Leonsis said in a statement.

Groupon said Mason was not available for interviews.

The announcement came one day after online deals company Groupon Inc. reported a bigger-than-expected loss and gave a weak revenue outlook for the current quarter. The guidance had fueled investor worry that people are getting fatigued with the online deals flooding inboxes daily and that the company's efforts to broaden into an e-commerce powerhouse haven't been paying off.

Groupon Inc., which went public in November 2011, makes money by taking a cut from the online deals it offers on a variety of goods and services. Investors have questioned whether that business model is sustainable and leads to growth over the long term — and whether the company can not only grow its customer base but make more from each subscriber.

Groupon has the advantage of being first. This has meant brand recognition and investor demand, as evidenced by its strong public debut. But the model is easy to replicate. It has spawned many copycats after its 2008 launch, from startups such as LivingSocial to established companies such as Google Inc. and Amazon.com Inc. Chicago-based Groupon Inc. also has faced scrutiny about its high marketing expenses, enormous employee base and the way it accounted for revenue.

Groupon's stock has lost about 77 percent of its value since the IPO after losing $1.45, or 24 percent, to close Thursday at $4.53. After the announcement of Mason's ouster, the stock gained 4 percent in after-hours trading following the announcement.

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Penney Reports Loss for Fourth Quarter

NEW YORK (AP) — J.C. Penney is reporting massive losses and plunging sales for its fiscal fourth-quarter as the department store chain's plan to scale back most coupons and sales events has continued to turn off shoppers.

The results mark a full year of massive losses under CEO Ron Johnson, who took on the role in November 2011 to overhaul every aspect of Penney's business.

The company, based in Plano, Tex., says it lost $552 million, or $2.51 per share, for the period ended Feb. 2. That compares with a loss of $87 million, or 41 cents per share in the year-ago period.

Revenue dropped 28.4 percent to $3.88 billion.

Analysts were expecting a loss of 23 cents on revenue of $4.08 billion.

Revenue at stores opened at least a year dropped 31.7 percent.

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DealBook: Wall Street Pay Rises, for Those Who Still Have a Job

It’s nice work – if you can get it.

Wall Street has cut thousands of jobs over the last year or so. On Tuesday, JPMorgan Chase, one of the country’s biggest banks, announced that it was eliminating 4,000 more jobs through layoffs and attrition, adding its name to a string of large banks that continue to cut jobs to reduce expenses.

The good news? For the employees who remain, pay is up, according to a report released Tuesday by the New York State comptroller.

This may seem surprising given the outcry over high compensation during the financial crisis. In recent years, however, faced with greater regulation, a slow economic recovery and the loss of once big moneymaking businesses like selling products tied to mortgages, the banks have tried instead to cut people rather than pay, which they argue is needed to retain talent that might otherwise leave for better paying jobs at hedge funds or elsewhere.

The average cash bonus for people employed in New York City in the financial industry rose by roughly 9 percent, to $121,900, in 2012 and cash bonuses in total are forecast to increase by roughly 8 percent to $20 billion this year, said Thomas P. DiNapoli, the state’s comptroller.

In recent years, some firms have deferred cash payments to employees, and Mr. DiNapoli said part of the increase in 2012 was cash promised in recent years but actually paid out last year. He said that it was “tough” to break out what percentage of the total were deferrals, but he believed that it was still a small part of the total.

All told, the average pay package for securities industry employees in New York was $362,900 in 2011, the last year for which data is available, almost unchanged from 2010.

Wall Street jobs are harder to get than they were just a few years ago, but for those who can get their foot in the door, finance remains the best paying sector in New York City, Mr. DiNapoli told reporters during a conference call

“Profits and bonuses rebounded in 2012, but the industry is still restructuring. Despite its smaller size, the securities industry is still a very important part of the New York City and New York State economies,” he said.

The current economic recovery, he said, is being driven by industries other than Wall Street, which he said has regained only 30 percent of the jobs lost during the downturn. The securities industry in New York City lost 28,300 jobs during the financial crisis and has added only 8,500 since, a net loss of 19,800 jobs. New York City financial industry employment totaled 169,700 at the end of 2012.

Before the start of the financial crisis, business and personal income tax collections from Wall Street related activities accounted for up to 20 percent of New York State tax revenue. In 2012, that contribution fell to 14 percent.

“Wall Street is still in transition, but it is very slowly adjusting to changes in its economic and regulatory environment,” he said.

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Media Decoder Blog: Online Piracy Alert System to Begin This Week

The Copyright Alert System, a program of escalating warnings and prods against people suspected of online copyright infringement, is finally going into effect this week, more than a year and a half after the plan was announced as part of an agreement between the entertainment industry and five major Internet service providers.

The Center for Copyright Information, the organization created to administer the system, announced on Monday that the Internet providers would begin putting it in place “over the course of the next several days,” though it gave no specifics. The Internet companies are AT&T, Cablevision, Comcast, Verizon and Time Warner Cable.

In the alert system, media companies monitor online traffic through a third party and can complain to Internet providers if a file is downloaded illegally. The suspected violator is then given the first of six warnings, some of which carry “educational” messages and must be acknowledged. After the fifth and sixth warnings, the customer’s Internet speed can be slowed to a crawl.

The Center for Copyright Information says it will not ask for repeat offenders’ Internet access to be blocked, but most service providers have the right to do that if a customer violates its terms of service. The findings can be contested for a $35 fee, to be refunded if an appeal is successful.

The introduction of the alert system has been notably slow. Nearly a year passed before the group had a leader in place, and its own prediction failed when it said in October that the system would be coming in two months. Part of the reason for that might be the relationships between media companies and Internet service providers, which in the past have often been adversarial over issues of piracy and control.

So-called graduated response programs like the Copyright Alert System have been tried in other countries, with mixed results. France’s Hadopi law, passed in 2009, set up a system of three “strikes,” culminating in a fine. More than a million warnings have been issued through that plan, but a recent government report said that its effects were “hard to evaluate precisely.”

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Major Banks Aid in Payday Loans Banned by States

Major banks have quickly become behind-the-scenes allies of Internet-based payday lenders that offer short-term loans with interest rates sometimes exceeding 500 percent.

With 15 states banning payday loans, a growing number of the lenders have set up online operations in more hospitable states or far-flung locales like Belize, Malta and the West Indies to more easily evade statewide caps on interest rates.

While the banks, which include giants like JPMorgan Chase, Bank of America and Wells Fargo, do not make the loans, they are a critical link for the lenders, enabling the lenders to withdraw payments automatically from borrowers’ bank accounts, even in states where the loans are banned entirely. In some cases, the banks allow lenders to tap checking accounts even after the customers have begged them to stop the withdrawals.

“Without the assistance of the banks in processing and sending electronic funds, these lenders simply couldn’t operate,” said Josh Zinner, co-director of the Neighborhood Economic Development Advocacy Project, which works with community groups in New York.

The banking industry says it is simply serving customers who have authorized the lenders to withdraw money from their accounts. “The industry is not in a position to monitor customer accounts to see where their payments are going,” said Virginia O’Neill, senior counsel with the American Bankers Association.

But state and federal officials are taking aim at the banks’ role at a time when authorities are increasing their efforts to clamp down on payday lending and its practice of providing quick money to borrowers who need cash.

The Federal Deposit Insurance Corporation and the Consumer Financial Protection Bureau are examining banks’ roles in the online loans, according to several people with direct knowledge of the matter. Benjamin M. Lawsky, who heads New York State’s Department of Financial Services, is investigating how banks enable the online lenders to skirt New York law and make loans to residents of the state, where interest rates are capped at 25 percent.

For the banks, it can be a lucrative partnership. At first blush, processing automatic withdrawals hardly seems like a source of profit. But many customers are already on shaky financial footing. The withdrawals often set off a cascade of fees from problems like overdrafts. Roughly 27 percent of payday loan borrowers say that the loans caused them to overdraw their accounts, according to a report released this month by the Pew Charitable Trusts. That fee income is coveted, given that financial regulations limiting fees on debit and credit cards have cost banks billions of dollars.

Some state and federal authorities say the banks’ role in enabling the lenders has frustrated government efforts to shield people from predatory loans — an issue that gained urgency after reckless mortgage lending helped precipitate the 2008 financial crisis.

Lawmakers, led by Senator Jeff Merkley, Democrat of Oregon, introduced a bill in July aimed at reining in the lenders, in part, by forcing them to abide by the laws of the state where the borrower lives, rather than where the lender is. The legislation, pending in Congress, would also allow borrowers to cancel automatic withdrawals more easily. “Technology has taken a lot of these scams online, and it’s time to crack down,” Mr. Merkley said in a statement when the bill was introduced.

While the loans are simple to obtain — some online lenders promise approval in minutes with no credit check — they are tough to get rid of. Customers who want to repay their loan in full typically must contact the online lender at least three days before the next withdrawal. Otherwise, the lender automatically renews the loans at least monthly and withdraws only the interest owed. Under federal law, customers are allowed to stop authorized withdrawals from their account. Still, some borrowers say their banks do not heed requests to stop the loans.

Ivy Brodsky, 37, thought she had figured out a way to stop six payday lenders from taking money from her account when she visited her Chase branch in Brighton Beach in Brooklyn in March to close it. But Chase kept the account open and between April and May, the six Internet lenders tried to withdraw money from Ms. Brodsky’s account 55 times, according to bank records reviewed by The New York Times. Chase charged her $1,523 in fees — a combination of 44 insufficient fund fees, extended overdraft fees and service fees.

For Subrina Baptiste, 33, an educational assistant in Brooklyn, the overdraft fees levied by Chase cannibalized her child support income. She said she applied for a $400 loan from Loanshoponline.com and a $700 loan from Advancemetoday.com in 2011. The loans, with annual interest rates of 730 percent and 584 percent respectively, skirt New York law.

Ms. Baptiste said she asked Chase to revoke the automatic withdrawals in October 2011, but was told that she had to ask the lenders instead. In one month, her bank records show, the lenders tried to take money from her account at least six times. Chase charged her $812 in fees and deducted over $600 from her child-support payments to cover them.

“I don’t understand why my own bank just wouldn’t listen to me,” Ms. Baptiste said, adding that Chase ultimately closed her account last January, three months after she asked.

A spokeswoman for Bank of America said the bank always honored requests to stop automatic withdrawals. Wells Fargo declined to comment. Kristin Lemkau, a spokeswoman for Chase, said: “We are working with the customers to resolve these cases.” Online lenders say they work to abide by state laws.

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The Haggler: Telemarketer’s Tactics and Regulators’ Response Elicit Complaints

LAST month, the Haggler was sitting at home when the phone rang.

“This is your second and final notice,” intoned the stern voice of a robocaller. This vaguely threatening opener segued quickly into a lilting spiel about credit cards and consolidation. Something about an offer to lower rates? It was hard to tell, but when the Haggler heard he could press 1 for more information, naturally, he pressed 1.

After a pause, a man introduced himself as Robert, and offered the services of Account Management Assistance. It was hard to tell exactly what A.M.A. was selling, but the Haggler was assured it would cost him nothing and reduce his credit card interest payments.

“Sure, I’m interested,” quoth the Haggler, hoping to draw out some information. But Robert was soon spooked by this softball question: “Where are you guys located?”

Click.

Intrigued, the Haggler typed A.M.A.’s phone number — captured on caller ID — into a Web site called 800notes.com, which provides a forum for those on the receiving end of unwanted calls. On pages dedicated to 855-462-3833, the Haggler found dozens of complaints, and many of those complainers had signed up for A.M.A.’s service. The company had charged as much as $2,000, promising to negotiate lower credit card rates with banks.

There were no satisfied customers.

“They got me too!” wrote one. “Lying freaks,” wrote another.

So the Haggler posted an invitation on the site, asking anyone disappointed by A.M.A. to get in touch. A week later, an e-mail arrived from Anna Mikiewicz of Palatine, Ill.

“The whole experience is enough to put someone in an early grave,” she wrote. “I’ve been run through the mill.”

Ms. Mikiewicz outlined how she’d been charged $1,000 by A.M.A. For her money, the company signed her up for a credit card that offered zero percent interest for a limited period, something she could have done herself, free. Her attempts to get a refund included dozens of calls, to a variety of employees at A.M.A., as well as unsuccessful efforts to persuade government bodies to investigate. Because A.M.A. gives its address as a post office box in Orlando, that included Florida’s attorney general’s office and Department of Agriculture and Consumer Services.

Nobody had helped.

Now it was the Haggler’s turn. Ms. Mikiewicz said that a man named Mark Dowell was the manager at A.M.A., and suggested that calls begin with him.

“May I speak to Mark Dowell?” the Haggler said, after dialing 407-480-4489, a number A.M.A. had provided to Ms. Mikiewicz back when they were speaking.

“He’s gone for the day,” replied a receptionist.

“Can you leave him a message?” said the Haggler.

“Hold, please,” she said.

“Who are you looking for?” she then asked.

“Mark Dowell.”

“We don’t have a Mark Dowell. We have a Mark Dolan. What company are you trying to reach?”

“Account Management Assistance.”

“You’ve got the wrong number.”

“Well, what company is this?”

“I can’t give out that information.”

“Really? How come?”

“It’s not in my job description.”

“Well, it’s not in my job description either. But I still tell people where I work.”

“What town is the company you’re trying to reach?”

“Orlando.”

“O.K. We’re Elephant Inc. We’re based in Hawaii.”

The next day, the Haggler called the same number, asking for Mark Dowell.

“He’s on the line with another customer. Would you like to leave a message?”

The Haggler did, twice, and has never heard back.

IT turns out that A.M.A. doesn’t have a Web site, and, other than that post office box, doesn’t seem to exist in physical space. Nonetheless, there are clues about who may be behind this operation. The Better Business Bureau has a page for a Florida company called Your Financial Ladder — which gets an “F” grade, by the way — that seems to do business as Account Management Assistance, as well as other names, including Economic Progress Inc.

Economic Progress, according to a 2012 Florida incorporation filing, is operated by Brenda Helfenstine. She and her husband, Tony, ran into some trouble last year. The attorney general of Arkansas sued Your Financial Ladder, and four other companies, accusing them of violating the Telemarketing Consumer Fraud and Abuse Prevention Act, among other laws. He named Brenda and Tony Helfenstine and accused their company of making illegal robocalls and assessing fees to consumers without providing promised aid.

So the Haggler called the Helfenstines, whose phone number was dug up by a Times researcher, Jack Styczynski, and left a message. Tony Helfenstine returned that call, but after follow-up calls, he went silent.

“This is your second and final notice,” the Haggler wisecracked on the Helfenstines’ answering machine, to his own great amusement. Nothing.

What about those government agencies? Well, a spokesman for the Florida Department of Agriculture and Consumer Services says it recently started an investigation of Your Financial Ladder that ended uneventfully after an inspector was dispatched to the contact address listed on the company’s Web site, 1760 Sundance Drive, in St. Cloud.

“The inspector noted that the address was a residence and that there was no evidence of a telemarketing operation at the time,” wrote Amanda Bevis, a spokeswoman for the department. “The investigation had reached a dead end.”

Actually, the investigation had reached the home of Brenda and Tony Helfenstine. Seriously, that address, according to easily accessible public records, is where the Helfenstines seem to live.

Deep breaths, people. Yes, it’s maddening that our consumer protection agencies are so easily foiled. Or unmotivated. Perhaps they need a nudge. So, dear readers, the Haggler cordially invites you to contact Adam Putnam, commissioner of Florida’s consumer services department, on Twitter at @adamputnam, and Pam Bondi, Florida’s attorney general, at @AGPamBondi. Tell them you care. And stay tuned.

E-mail: haggler@nytimes.com. Keep it brief and family-friendly, include your hometown and go easy on the caps-lock key. Letters may be edited for clarity and length.

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DealBook: Judge Sides With Einhorn and Halts an Apple Shareholder Vote

4:24 p.m. | Updated

A federal judge on Friday ordered Apple to halt collecting shareholder votes on a contentious proposal to change some of its corporate charter, handing a victory to the hedge fund manager David Einhorn.

The ruling issued Friday touches on a fairly narrow legal point. But it signals a clear win by Mr. Einhorn, who has taken up a fight with Apple over using some of its $137 billion cash hoard to make additional payouts to shareholders.

Mr. Einhorn’s firm, Greenlight Capital, has sued the iPad maker in federal district court in Manhattan, arguing that the company improperly tied together several shareholder in one voting matter. Such “bundling,” lawyers for the hedge fund argued, violated rules set y the Securities and Exchange Commission.

By allowing the vote to proceed, lawyers for the firm argued, Greenlight was being forced to vote against its own interests.

The judge overseeing the case, Richard Sullivan, firmly agreed with that interpretation.

“Given the language and purpose of the rules, it is plain to the court that Proposal No. 2 impermissibly bundles ‘separate matters’ for shareholder consideration,” Judge Sullivan wrote in his order.

His ruling orders Apple to stop accepting shareholder votes on Proposal No. 2, and comes just days before the company’s shareholder meeting next Wednesday. In a court hearing on Tuesday, Judge Sullivan candidly admitted that he believed Greenlight’s argument had legal merit.

Greenlight said in a statement: “This is a significant win for all Apple shareholders and for good corporate governance. We are pleased the Court has recognized that Apple’s proxy is not compliant with the S.E.C.’s rules because it bundles different matters in Proposal 2.”

A representative for Apple wasn’t immediately available for comment.

The company will now likely have to break up Proposal No. 2 into its separate elements and resubmit them to a vote. The timing of that move isn’t clear.

Apple had argued that the plan in its entirety was actually shareholder-friendly, and enjoyed the backing of prominent investors like the California Public Employees Retirement System.

Anne Simpson, Calpers’ director of global governance, said in a statement: “”We continue to support Apple in their efforts, and believe that the implementation of majority voting and shareholder approval for the issuance of new stock – preferred or otherwise – is worth waiting for.”

At the heart of the hedge fund’s complaint was that Apple combined a plan to eliminate its ability to issue preferred stock without shareholder approval with two other initiatives that Greenlight favored.

Behind the lawsuit is a call by Mr. Einhorn for Apple to issue preferred shares — upon which he bestowed the cutesy name “iPrefs” — that will augment an existing stock dividend and buyback program.

The hedge fund has contended that the company has far more cash than it will ever need, and that preferred shares could provide additional payouts worth about $61 a share, while still leaving the company with an enormous war chest.

“We know they embrace innovation and can recognize it when they see it, even if it isn’t the kind of innovation people usually think of when they think of Apple,” Mr. Einhorn said on a conference call with analysts on Thursday.

Ruling for Greenlight Capital in Battle With Apple

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H.P. Reports Decline in Revenue and Profit

SAN FRANCISCO — Battling a declining demand for personal computers, Hewlett-Packard, the world’s largest maker of PCs, reported lower quarterly earnings on Thursday.

The earnings were significantly higher than analysts had expected, however.

“The turnaround is starting to gain traction as a result of the actions we took in 2012 to lay the foundation of H.P.’s future,” Meg Whitman, the chief executive, said in a statement accompanying the earnings. “I feel good about the rest of the year.”

H.P. said net income fell 16 percent to $1.2 billion, or 63 cents a share, from the year-ago quarter.

The company said revenue fell 6 percent, to $28.4 billion.

Wall Street analysts had expected net income of 71 cents a share and revenue of $27.8 billion, according to a survey of analysts by Thomson Reuters.

H.P., based in Palo Alto, Calif., is one of the world’s largest suppliers of both PCs and computer servers. Demand for PCs has been shrinking, because of the popularity of tablets and smartphones, which H.P. doesn’t make. Servers face shrinking profit margins as more companies look beyond brand names and buy low-priced machines in bulk from Asian vendors.

Under Ms. Whitman, H.P. has focused on restructuring its printers and high-end server business to incorporate more data-analysis software that searches for documents and compiles reports like the energy use of the data center. She has warned, however, that the turnaround may take until 2017. In 2012, the company announced it would lay off 29,000 employees.

H.P.’s earnings announcement comes two days after a report of lower revenue and earnings by Dell Computer, H.P.’s main American rival.

Dell said its first-quarter revenue fell 11 percent, to $14.3 billion, while net income was off 31 percent, to $530 million, or 30 cents a share.

Michael Dell, Dell’s founder, has proposed taking his company private, for about $24.4 billion, to focus on restructuring the company away from the eyes of Wall Street.

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Boeing to Propose Battery Fixes to F.A.A.

A top Boeing executive plans to meet with the head of the Federal Aviation Administration on Friday to propose fixes for the battery problems that have grounded its innovative 787 jets, industry and government officials said Wednesday.

They said the company feels confident that it has narrowed down the possible ways that the new lithium-ion batteries could fail, increasing the chances that a handful of changes might provide enough assurance that the batteries would be safe to use.

The F.A.A.’s top official, Michael Huerta, is not expected to approve the changes on Friday when he is scheduled to meet with Ray Conner, the president of Boeing’s commercial airplane division. But the meeting could start a high-level discussion and provide Boeing with early guidance on the mix of changes that would be needed to get the planes back in the air.

The government and industry officials agreed that Boeing will ultimately have to redesign at least part of the batteries to eliminate the risk that a short-circuit or fire in one of the eight cells inside could spread to the others, as investigators have said occurred on a battery that caught fire at a Boston airport on Jan. 7.

One important question is how far Boeing will have to go in making the changes before the F.A.A. will let airlines resume flights with the 50 jets that have already been delivered.

The officials said Boeing might have to take some immediate steps to insulate the cells from one another and then make greater changes over time to further eliminate possible ways that the batteries could fail.

Boeing, based in Chicago, would also have to wall off the battery within a sturdier metal container, add systems to monitor the activity inside each cell and create channels to vent any hazardous materials outside the plane.

Until now, most of the public statements by regulators have focused on the need to pin down the cause of the battery problems. But investigators, now weeks into their work, have been able to find only limited clues in the charred remains of the two batteries.

As a result, government and outside experts, working closely with Boeing engineers, have been studying the recent problems and research on lithium-ion batteries carried out since Boeing won approval for its batteries in 2007 and, in essence, trying to come up with a safer design.

Aviation experts said the examination of such changes reflected what could end up being a difficult calculation for safety regulators: Will there be a way to ensure the safety of the batteries if they cannot tell for certain what set off the problems on the two planes?

The F.A.A. and other regulators around the world grounded the new fuel-efficient planes after another one of the jets made an emergency landing in Japan on Jan. 16 with smoke in the battery compartment.

The lithium-ion batteries weigh less but provide more energy than conventional batteries, and the 787s make greater use of them than other planes. The stakes are substantial for Boeing, which will have to pay penalties to some of the airlines that have been unable to use them. Boeing also cannot deliver more of the planes while they are grounded.

The company has orders for 800 additional planes, which are expected to usher in a new era in aviation. The jets rely as well on lightweight carbon composites and new engines to cut fuel consumption by 20 percent.

Federal and industry officials said Boeing would probably have to spread the eight cells in the batteries farther apart — or increase the insulation between them — to keep a failure in one cell from cascading to the others in the “thermal runaway” that led to the smoke and fire.

Battery experts are also looking into whether vibrations in flight could have added to the risks of unwanted contact between the cells.

But it is not clear how long it will take to make each of these changes and test them to the satisfaction of regulators. So engineers for the F.A.A and Boeing have been discussing which changes would have to be made immediately and which ones could be added later.

Government and industry officials that it was still too early to know if Boeing’s current plans would satisfy regulators and the flying public.

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DealBook: In the Year of the Snake, Challenges for the Chinese Economy

China is back to work after a weeklong holiday to celebrate the Chinese New Year. Most business shut for the entire week and the scale of human migration was awesome. This year, the Chinese made 440 million trips during the lunar holiday.

Chinese people spend a lot of money during this period, shoot off a lot of fireworks and increasingly travel overseas. Retail sales in the period were $86 billion, up 14.7 percent from last year though the growth rate was down from 16.7 percent pace in 2012. The government’s frugality campaign may be to blame, as well as the increase in foreign travel. China UnionPay reported that overseas bank card transactions increased 33 percent from last year.

Firework sales were off 45 percent in Beijing this year. This was my seventh consecutive Spring Festival in Beijing, and while there were still a lot of explosions, the pyrotechnics were noticeably more restrained than in prior years. The good news is that “no deaths or cases of eyeball extraction were reported” in Beijing and fireworks-induced air pollution was relatively light.

We are now in the Year of the Snake. Snake years unfortunately may be bad for stocks. According to Sam Stovall, chief equity strategist at S&P Capital IQ:

Since 1900, the S.&P. 500 posted its only average calendar-year decline during the Year of the Snake, falling 3.8 percent, and rising in price just 33 percent of the time, which was the worst price performance and frequency of advance of all 12 years.

THE CHINESE STOCK MARKETS reopened Monday to a small gain but on Tuesday dropped the most in five weeks. The proximate cause of Tuesday’s decline was a report that Beijing is so concerned by the resurgent property market it may impose additional real estate restrictions between now and the annual meeting of the National People’s Congress in early March. The markets here have had a good run since December and a few of my punter friends have decided to take some profits.

This column has repeatedly noted the doubts about the reliability of Chinese economic statistics. Stephen Green of Standard Chartered has published a new report in which he questions the official gross domestic product data for the last two years. Mr. Green writes:

Our guesstimates for the past two years look considerably weaker than the official estimates: our guesstimates for 2011 and 2012 are 7.2% and 5.5%, respectively, compared with the official prints of 9.3% and 7.3%.

Most economists still seem to believe China’s G.D.P. growth rate is closer to the official figures. In early February, an official of the Reserve Bank of Australia gave a speech titled “Reflections on China and Mining Investment in Australia” in which he said that China’s G.D.P. growth has stabilized around 8 percent. Australia’s economy is heavily dependent on China, and the Australian central bank still maintains a relatively bullish view about China’s future demand for commodities.

The stakes are high, especially for economies like Australia that are heavily reliant on commodities exports to China. One observer argues that at least in the short-term, Chinese commodity demand will be strong, maybe not because the Chinese economy is “healthy” but rather because total lending in January 2013 grew 15 percent faster than it did at the peak of China’s credit boom in 2009.

PERHAPS THE MOST IMPORTANT CHALLENGE for the Chinese economy is how quickly it can rebalance from credit to consumption-driven growth. Michael Pettis, a Wall Street refugee who teaches at Peking University, has been one of the most prominent foreign voices on this topic. He has just written a new book, “The Great Rebalancing: Trade, Conflict, and the Perilous Road Ahead for the World Economy,” and is now giving interviews on his book tour, including “weaning China off credit-fueled growth” and how to spot early signs of economic reform.

Eswar Prasad, a former International Monetary Fund official with responsibility for China, seems a bit more optimistic than Mr. Pettis about the rebalancing efforts and wrote on Tuesday that Beijing was making progress toward rebalancing:

New data suggest that it is time to revise the view that China’s growth is driven largely by exports and investment. Private and government consumption together accounted for more than half of China’s output growth in 2011-12, signaling a big shift in the composition of domestic demand. Physical capital investment, the main driver of growth over the previous decade, is no longer the dominant contributor to growth. As for exports, a shrinking trade balance has in fact dragged down growth these past two years.

In January, an “airpocalypse” across much of China led to plenty of hacking coughs, including for yours truly. But a different kind of hacking in China is noticeable in February.

BusinessWeek Magazine’s cover article last week was “A Chinese Hacker’s Identity Unmasked.” On Tuesday, The New York Times reported on its front page that “China’s Army Is Seen as Tied to Hacking Against U.S.” The Chinese government responded that it opposes the hacking allegations.

A week ago, President Obama signed an executive order about protection against cyber attacks, and according to The New York Times article, “The United States government is planning to begin a more aggressive defense against Chinese hacking groups, starting on Tuesday.”

The article does not specify what is entailed in a more aggressive defense, but if the United States wants concrete results then naming and shaming people and groups in China may be just one piece of a much broader response.

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The Media Equation: In Omaha Manhole Fire Photo, Logging Off in Search of Some Clues

Stephanie Sands

This image, which was taken after an underground fire cut power in half of downtown Omaha, captivated the Web last month.

When photographs of spontaneous events miraculously appear on the Web, it generally prompts two responses: wonder and skepticism.

Matt Miller/Omaha World-Herald

Matthew Hansen, a columnist at The Omaha World-Herald, showed how to follow a trail. 

So it was with an image of exploding manhole covers in Omaha that took over the Web last month. On Sunday, Jan. 27, an underground fire cut power in half of downtown. A vivid photograph of unknown provenance, showing fire shooting out of manholes on a city street, began popping up on Reddit, where it had 1.5 million views, and Gawker.

The photo — an indifferently composed shot of an event that looks very far away — would not win any Pulitzers, but something incredible seems to be under way at the precise moment it was taken. You can almost hear the sequential explosions emanating below the street: boom, boom, boom as flames appear to shoot up from hell itself.

In this age of Photoshop, it wasn’t long before the debates cropped up, on the Web and in Omaha, about the picture’s authenticity.

Matthew Hansen, a columnist at The Omaha World-Herald, wondered the same thing, and one night found himself in a bar engaged in the real-versus-fake debate. Like many photos on the Web, this one came from everywhere — forwarded, tweeted and blogged — and nowhere — there was no name on the image nor any text to indicate its origin.

Mr. Hansen, intrepid journalist that he is, solved the mystery and wrote a column about it. The photo was real, it turned out, but not in the way people thought. (More on that later.) So, did Mr. Hansen use deep photo analytics or examine metadata to peel back the truth?

Nope. There was a notebook involved, a lawyer, some phone calls, a cursory digital investigation and some street reporting, which included an interview with a man with no pants.

Shoe leather never looked or smelled so good.

Mr. Hansen’s first step in solving what he called the “Great Omaha Manhole Fire Photo of 2013” was to determine from the angle of the photo that it could have been taken from only one apartment building — called the Kensington Tower. He then used an architectural detail to conclude that it was shot from the top floor, on the west side.

He managed to gain entry to the building — that is, he sneaked in — and made his way to the top floor, where he began knocking on doors.

Mr. Hansen found a man named Kenneth who would not let Mr. Hansen in because he was indisposed — he became “Pantsless Kenneth” in the column — but said that he knew the photo in question and thought his neighbor had taken it.

But the neighbor wasn’t home, so Mr. Hansen stuck his business card in the door jamb and left.

When he returned to the office, Mr. Hansen jumped onto Reddit, found the person who had originally posted the photo there and through him found the person, Gwendolyn Olney, who had posted the photo on her Facebook page, the source for the Reddit posting.

Ms. Olney happened to be the associate counsel for The World-Herald. “Omaha is indeed a small town,” Mr. Hansen wrote in his column. He began to follow the pixilated bread crumbs.

“Gwen didn’t take the photo,” he added. “She got it from Rebecca, who didn’t take the photo. She got it from Brandon, who didn’t take the photo. They led me to Gwen’s friend Andrea, who didn’t take the photo, who led me to ... well, she couldn’t remember who she had gotten the photo from.”

Reading the column, you could almost hear his sigh when he wrote, “Dead end.”

Then his phone rang. “I took that photo,” the voice said.

The caller was Stephanie Sands, a graduate student at the University of Nebraska at Omaha. She said that the day after she took the photo, which she had no idea had become a sensation, she learned from her friends that a reporter was asking about it.

“I was impressed that he had sneaked upstairs and put a card in my door, so I called him,” she said in an interview by phone.

Ms. Sands agreed to meet Mr. Hansen and told him that she had heard the explosion and took two photos with her phone. She sent one to friends and thought nothing more of it.

“I was actually disappointed in how it turned out,” she told me. “Because I was shooting at a distance with an iPhone, it didn’t really capture the severity of what I saw and heard.”

This article has been revised to reflect the following correction:

Correction: February 17, 2013

An earlier version of this column misquoted Matthew Hansen, a columnist at The Omaha World-Herald, about the author of a profile on Edna Buchanan, a crime writer. Mr. Hansen said the writer of the profile was Calvin Trillin, not Gay Talese. 

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Obama’s Keystone Pipeline Decision Risks New Problems, Either Way

WASHINGTON — President Obama faces a knotty decision in whether to approve the much-delayed Keystone oil pipeline: a choice between alienating environmental advocates who overwhelmingly supported his candidacy or causing a deep and perhaps lasting rift with Canada.

Canada, the United States’ most important trading partner and a close ally on Iran and Afghanistan, is counting on the pipeline to propel more growth in its oil patch, a vital engine for its economy. Its leaders have made it clear that an American rejection would be viewed as an unneighborly act and could bring retaliation.

Secretary of State John F. Kerry’s first meeting with a foreign leader was with Canada’s foreign minister, John Baird, on Feb. 8. They discussed the Keystone pipeline project, among other subjects, and Mr. Kerry promised a fair, transparent and prompt decision. He did not indicate what recommendation he would make to the president.

But this is also a decisive moment for the United States environmental movement, which backed Mr. Obama strongly in the last two elections. For groups like the Sierra Club, permitting a pipeline carrying more than 700,000 barrels a day of Canadian crude into the country would be viewed as a betrayal, and as a contradiction of the president’s promises in his second inaugural and State of the Union addresses to make controlling climate change a top priority for his second term.

On Sunday, thousands of protesters rallied near the Washington Monument to protest the pipeline and call for firmer steps to fight emissions of climate-changing gases. Groups opposing coal production, fracking for natural gas and nuclear power were prominent; separate groups of Baptists and Catholics, as well as an interfaith coalition, and groups from Colorado, Toronto and Minneapolis joined the throng.

One speaker, the Rev. Lennox Yearwood, compared the rally to Martin Luther King’s 1963 March on Washington for civil rights, but, he said, “while they were fighting for equality, we are fighting for existence.” In front of the stage was a mockup of a pipeline, looking a bit like the dragon in a Chinese new year parade, with the motto, “separate oil and state.”

Michael Brune, executive director of the Sierra Club, predicted that Mr. Obama would veto the $7 billion project because of the adverse effects development of the Canadian oil sands would have on the global climate.

“It’s rare that a president has such a singular voice on such a major policy decision,” Mr. Brune said. “Whatever damage approving the pipeline would do to the environmental movement pales in comparison to the damage it could do to his own legacy.”

Mr. Brune was one of about four dozen pipeline protesters arrested at the White House on Wednesday, in an act of civil disobedience that was a first for the 120-year-old Sierra Club.

So far, Mr. Obama has been able to balance his promises to promote both energy independence and environmental protection, by allowing more oil and gas drilling on public lands and offshore while also pushing auto companies to make their vehicles more efficient. But the Keystone decision, which is technically a State Department prerogative but will be decided by the president himself, defies easy compromise.

“This is a tricky political challenge for the president,” said Michael A. Levi, an energy fellow at the Council on Foreign Relations. “The reality is everyone has defined the stakes on Keystone in such absolute terms that it is borderline impossible to see a compromise that will satisfy all the players.”

The proposed northern extension of the nearly 2,000-mile Keystone XL pipeline would connect Canada’s oil sands to refineries around Houston and the Gulf of Mexico, replacing Venezuelan heavy crude with similar Canadian grades.

Proponents say its approval would be an important step toward reducing reliance on the Organization of the Petroleum Exporting Countries for energy. Opponents say that the expansion of oil production in shale fields across the country has already reduced the need for imports, and that oil sands production emits more greenhouse gases than most other forms of crude consumed in the United States.

The State Department appeared poised to approve the pipeline in 2011, but Mr. Obama delayed a decision based on concerns about its route through vulnerable grasslands in Nebraska. The pipeline company, TransCanada, submitted a revised route, and the governor of Nebraska approved the plan last month, sending the final decision to Washington.

The Keystone pipeline is treated mainly as a domestic issue in Washington, but for Canadian leaders, it represents a crucial moment in Canada’s relationship with its most vital foreign partner.

Mr. Obama and Prime Minister Stephen Harper are not close, and the two make a portrait of contrasts in style and substance. While Mr. Obama comes from the liberal wing of his party and is known for stirring speeches, Mr. Harper is conservative even by the standards of his own Conservative Party and can be stiff and stern in public. His political base, the province of Alberta, is the heart of the Canadian oil patch and is sometimes compared socially and politically to Texas.

Mr. Obama’s recent expressions of concern about climate change contrast starkly with Mr. Harper’s stated priorities. Under Mr. Harper, Canada formally withdrew from the Kyoto Protocol on climate change, which was agreed to by a previous Liberal government. (The United States never ratified the protocol.)

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The Boss: Bert Quintana of Sitel, on Making Career Choices

I WAS born in Cuba, and I was 2 when my parents brought me to the United States in 1962 with my baby brother, Jorge.

Bert Quintana is the president and C.E.O. of Sitel, a call center and telemarketing company based in Nashville.

AGE 52

NAME OF HIS BOAT Sea Gem

FAVORITE SPORT Golf

SPORTS HERO Don Shula, former Miami Dolphins coach

We passed through the Freedom Tower, an assistance center in Miami for Cuban refugees, and a year later a religious group, the Damas Catolicas, moved us to Dallas and helped my mom find work as a nurse. My dad, who had a fifth-grade education, was a mechanic. My mother would work the evening shift at a hospital, often followed by the night shift, and my dad would work from 7 a.m. to 3 p.m. so that one of them could be home with us.

We couldn’t afford laundry detergent, so my mom used gasoline to clean our clothes. One day she was using a space heater at the same time. We knew nothing about the danger. The gas caught fire, and my mom and brother were burned. They still have a few scars.

My parents eventually bought a house, but they divorced when I was 9 and my mother moved back to Miami with Jorge and me. In high school I worked in a hospital lab after classes as part of a research program. I won a community science award and several science fair awards as a result of what I learned. On the weekends, I apprenticed as a machinist in my uncle’s production shop, which sparked my interest in engineering. I was high school valedictorian and attended the University of Miami for a bachelor’s degree in electrical engineering, graduating in 1983.

In 1984, I started at Florida Power and Light in an entry-level engineering position. One of my responsibilities was to put into practice the business process improvement techniques of W. Edwards Deming. My training for that led to my moving to the company’s call centers, and within six years I was managing the largest one.

In 1994, I moved to MCI Telecommunications. By the time I left, two years later, I’d risen to regional director of the customer service support division.

I was a vice president for the customer care call centers at ADT in 1997, the year it was acquired by Tyco, and the next year I served as president for another home security company.

A headhunter called about a position at Dell as director of its consumer sales operation. Because it was an international company, the job would mean that I could leverage my bilingual skills and learn more about the global marketplace. I accepted, and by 2003 was promoted to vice president of the international services division.

I had been planning to take a sabbatical for quite a while, or perhaps start my own business, and the planets aligned when there was a reorganization at Dell. I left the company in 2006 and my wife, Alicia, and I sailed around the Bahamas and explored the islands on our 43-foot sailboat. We also started fixing and selling homes in Key Largo, where we now live part of the time.

In 2009, another headhunter called about the position of chief operating officer at Sitel. When I was considering whether to take the job, I asked one of the company’s major investors what winning looked like to him. He described it as having someone help him build a company he could be proud of. That response persuaded me to take the job. In 2010, I was appointed president and, in 2011, C.E.O.

While on sabbatical, I mentored former colleagues who asked for advice. My wife said my eyes would light up whenever I talked to them — a sign to both of us that I wanted to get back in the game. People talk about passion, focus, balance and making a difference as the definition of success. I feel as if the planets are aligned for me again.

As told to Patricia R. Olsen.

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DealBook: SAC Investors Ask to Withdraw $1.7 Billion

Clients of SAC Capital Advisors have asked to withdraw $1.7 billion from the giant hedge fund amid an intensifying insider trading investigation involving the fund, according to people briefed on the matter.

That amount represents slightly more than a quarter of the $6 billion that SAC manages for clients, and is the largest amount ever withdrawn from the fund. Clients had to inform SAC by Thursday – a regularly scheduled quarterly redemption deadline – whether they wanted to redeem their money.

While the outflows are a blow to the fund founded by Steven A. Cohen, which boasts one of the best investment track records on Wall Street, they are expected to have little impact on the fund’s business. More than half of SAC’s assets under management, which stood at $15 billion as of mid-January, belong to Mr. Cohen and his employees.

“As we have been saying, the redemptions will have no significant impact on our funds,” an SAC spokesman said in a statement.

Still, the amount highlights the reputational damage wrought on SAC by the wave of insider trading cases involving the Stamford, Conn.-based hedge fund. Among the high-profile clients taking money out of the fund include a Citigroup unit that manages money for wealthy families and Lyxor Asset Management, a division of the French bank Societe Generale.

Other SAC clients have taken a more wait-and-see approach, keeping their money with the fund while monitoring developments in the insider trading inquiry. Blackstone Group, SAC’s largest outside investor, took this route, saying it would keep its $550 million investment with the fund for at least the next three months while it learns more information about the latest criminal case against SAC.

In late November, the government brought charges against Mathew Martoma, a former SAC portfolio manager, in a prosecution that they are calling the most lucrative insider trading scheme ever uncovered. The trades at the center of the case involve Mr. Cohen, who has not been charged and denied wrongdoing. Mr. Martoma has pleaded not guilty.

At least seven other current or former SAC employees have been tied to allegations of insider trading while working there, four of whom have pleaded guilty. And the Securities and Exchange Commission has advised SAC that they might file a civil fraud action against the firm related to the Martoma trades.

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Cardinal Health Buys AssuraMed for $2 Billion

Cardinal Health, the second-largest distributor of prescription drugs, announced on Thursday that it was buying a large medical supplier in a $2 billion deal aimed at expanding the business into the growing area of home health care.

The medical supplier, the privately held AssuraMed, supplies products for home use to aid treatment of diabetes, wounds, incontinence and other conditions. It had revenue of $1 billion in 2012, Cardinal Health said.

AssuraMed, which has been owned by the private equity firms Clayton, Dubilier & Rice and Goldman Sachs’s GS Capital Partners, serves more than one million patients nationwide and sells more than 30,000 products.

In an interview, George S. Barrett, Cardinal’s chairman and chief executive, said the acquisition was aimed at taking advantage of a confluence of national trends: the aging population, which has led to an increase in patients with chronic conditions, and more treatment of those conditions at home or in nonhospital settings like doctors’ offices and outpatient clinics.

“One of the things that has become clear is we’re going to have to manage patients differently,” Mr. Barrett said. “It very strategically aligns with where we think health care is moving, and it’s a natural extension of our skill set.”

In a conference call with investors, Mr. Barrett said the home health care area was growing at nearly 7 percent and represented a market opportunity of about $16 billion.

The deal is expected to close in April and will be financed with a combination of $1.3 billion in senior unsecured notes and cash. Cardinal estimated the acquisition would add 2 to 3 cents to its earnings a share in 2013, and 18 cents a share by 2014.

Cardinal, based in Dublin, Ohio, had revenue of $108 billion in 2012, and ranks second in the drug-distribution market behind the McKesson Corporation, based in San Francisco. AssuraMed is based in Twinsburg, Ohio.

Shares in Cardinal closed up 56 cents, or 1.2 percent, at $46 on Thursday.

Cardinal was advised by Bank of America Merrill Lynch and the law firm Wachtell, Lipton, Rosen & Katz. Clayton Dubilier and GS Capital were advised by JPMorgan Chase, Goldman Sachs and the law firm Debevoise & Plimpton.

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Cisco Tops Expectations With Rise in Profit of 44%

SAN FRANCISCO — Cisco Systems reported surprisingly strong results for its second quarter despite concerns about weak demand in some areas.

Cisco, the San Jose, Calif., networking giant, said that net income in the second quarter rose 44 percent to $3.1 billion, or 59 cents a share, from the year-ago quarter.

The company said revenue climbed 5 percent, to $12.1 billion.

Excluding certain items, such as tax gains and stock-compensation expenses, Cisco had earnings of 51 cents per share.

The results exceeded the expectations of Wall Street analysts, who had projected earnings of 48 cents a share and revenue of $12.06 billion, according to a survey of analysts by Thomson Reuters.

“Cisco delivered record earnings,” John Chambers, Cisco’s chief executive officer, said in a release accompanying the results. “We are making solid progress towards our goal of becoming the number-one information technology company in the world.”

Cisco has traditionally met, or slightly exceeded, Wall Street’s earnings expectations.

Over the past two years, Cisco has reorganized, paring down much of its consumer business and refocusing on new technology initiatives, such as cloud computing.

In December, Mr. Chambers announced plans to move Cisco from just selling gear that routes Internet data into the development of highly networked systems of sensors and data analysis machines. That plan, which involves working closely with large companies and governments, remains in its early stages.

Sales of regular networking equipment to government remains a key part of Cisco’s business. Analysts had been concerned that poor demand from governments, along with economic jitters in Europe, could hurt Cisco’s performance.

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DealBook: Big Investors Strengthen Opposition to Dell's Sale

12:29 p.m. | Updated

One of the country’s biggest mutual fund managers signaled its opposition to Dell‘s proposed $24.4 billion sale on Tuesday, as another investor disclosed a major step in a campaign to fight the deal.

T. Rowe Price said in a statement that it was opposed to the $13.65-a-share takeover bid being offered by the company’s founder, Michael S. Dell, and the investment firm Silver Lake. With a stake of about 4.4 percent, T. Rowe Price is Dell’s third-biggest shareholder.

The second-biggest shareholder, Southeastern Asset Management, meanwhile disclosed in a regulatory filing that it had retained D.F. King, a big proxy solicitation firm, as an adviser. It also confirmed that it held about 8.44 percent of Dell’s shares, trailing only Mr. Dell.

Proxy solicitors like D.F. King play important roles in fights over shareholder votes. They canvass a company’s investor base, providing their clients with estimates of how shareholders are leaning and strategies for winning over allies.

Southeastern has also hired Dennis J. Block of Greenberg Traurig, an experienced mergers and acquisitions lawyer, according to a person briefed on the matter.

The emergence of T. Rowe Price as an opponent of the deal is the latest sign of discontent with the management buyout bid. While Mr. Dell controls about 16 percent of the company’s stock, his offer for the computer maker requires the approval of a majority of independent shareholders.

In a statement, T. Rowe Price’s chairman and chief investment officer, Brian C. Rogers, said, “We believe the proposed buyout does not reflect the value of Dell, and we do not intend to support the offer as put forward.”

A spokesman for Dell repeated a statement made on Friday, saying that a special committee of the board had considered a number of strategic alternatives. “Based on that work, the board concluded that the proposed all-cash transaction is in the best interests of stockholders,” according to the statement.

Silver Lake declined to comment. 

Shares of Dell closed on Monday above the buyout price for the first time since the offer was announced last week, signaling expectations that the bid might be increased.

In a company release on Friday, Southeastern said it planned to consider all of its options to fight the deal, including a proxy fight, a lawsuit and calling on a Delaware court to determine the fair value of Dell shares.

The high price the firm paid for its holding is probably driving its opposition. Analysts have estimated that Southeastern paid more than $20 a share on average, meaning it would lose over $800 million if the current deal were completed.

A person close to the firm disputed that estimate, suggesting that Southeastern’s cost basis was closer to $16.90 a share.

Southeastern and its chief executive, O. Mason Hawkins, have been unafraid to challenge companies when their stock prices fall. The firm was a major force for change at the oil and natural gas driller Chesapeake Energy last year, eventually winning representation on its board.

With Dell, there is a long road ahead. The vote for shareholders to approve the buyout offer is at least several months away.

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American and US Airways Are Expected to Announce Merger This Week

After months of negotiations, American Airlines and US Airways are expected this week to announce a merger, which would create the nation’s biggest airline and concentrate even further a once-fragmented industry.

A merger would expand American’s domestic network, particularly in the Northeast and the Southwest, and create a more formidable competitor internationally. The combined airline would jump ahead of United Airlines and Delta Air Lines, both of which have grown through mergers of their own in recent years.

The combination would probably bring to an end the wave of consolidation that has swept the industry. Since 2001 there have been five large mergers, reducing the number of airlines to three main carriers, along with a handful of low-cost carriers like Southwest Airlines and JetBlue, and regional carriers.

These mergers have led to cuts in service to many smaller cities around the country. But they have also created healthier and more profitable airlines that are able to invest in new planes and products. Faced with rising fuel costs, and losing tens of billions of dollars in the last decade, airline executives argued that the only way to survive was to consolidate capacity.

American, which has been in bankruptcy protection since November 2011, is currently the nation’s third-largest airline with domestic and international flights; US Airways is the fourth.

The boards of both carriers are expected to meet on Monday to approve the combination, which then needs to be approved by a bankruptcy judge in New York. A tie-up also requires the approval of federal regulators and antitrust authorities. But analysts expect regulators to approve the deal since there is little overlap between the two networks and no hubs in the same cities.

Even if the deal clears all these hurdles, the merged airline still faces a range of challenges. Airline mergers are often rocky — involving complex technological systems, big reservation networks as well as large labor groups with different corporate cultures that all need to be combined seamlessly. United angered passengers last year after a series of merger-related computer and reservation mistakes, and late and delayed flights.

A deal would be a major victory for Doug Parker, the chairman of US Airways, who began pursuing a merger with the bigger carrier soon after American filed for bankruptcy. His argument — that American could succeed against bigger airlines only if it combined networks with US Airways — swayed American’s creditors who have a critical say in the company’s future.

The carriers have been discussing a deal for months. In recent days, both sides have moved much closer but were still trying to figure out how much the merged carrier would be worth and how management positions would be split.

Tom Horton, American’s chairman, who was opposed to a merger for much of the last year, was offered a position as nonexecutive chairman, said a person familiar with the matter but who asked not to be identified because the talks were still under way. US Airways shareholders could end up with about 28 percent of the new airline, and American’s creditors would have 72, this person said.

A merger could be structured to take effect as American exits bankruptcy. The airlines are pushing for a deal before Feb. 15, when some nondisclosure agreements with American bondholders are set to expire.

The new airline will be called American Airlines and based in Dallas. It will have a combined 94,000 employees, 950 planes, 6,500 daily flights, nine major hubs, and total sales of nearly $39 billion. It would be the market leader on the East Coast, the Southwest and South America. But it would remain a smaller player in the Pacific and Europe, where United and Delta are stronger.

Mr. Parker deftly outmaneuvered Mr. Horton by lobbying American’s employees. He gained an important edge last April when he won the public support of American’s three main labor groups. More recently, pilots from both airlines agreed on how they would work together if the merger succeeded.

The success of these labor discussions, even before the merger was formally discussed, helped persuade American’s creditors to follow Mr. Parker’s strategy.

Mr. Horton, and American’s management team, had argued that they should complete the carrier’s reorganization and emerge from bankruptcy as an independent airline before considering any mergers.

But under pressure from Mr. Parker, the management of American Airlines was eventually forced by its creditors to talk to Mr. Parker about a merger. All that was left then was to figure out who was going to lead the merged airline and how much it would be worth.

Mr. Parker, more than anyone in the business, knows the difficulty of integrating two airlines. In 2005, he orchestrated the merger of the airline he was then running, America West, with a larger carrier, US Airways. But pilots from each of these two original airline have yet to agree to a common contract and seniority rules, and, to this day, cannot fly together.

The difficulty is likely to be compounded at American. In bankruptcy, American cut thousands of jobs, reduced benefits, froze pensions, and sought higher productivity rules from its employees.

Before the US Airways-American deal, the last major combination was the acquisition of AirTran by Southwest, completed in 2011. That followed the merger of United and Continental Airlines in 2010, which created the current leader, and before that Delta with Northwest.

American has major hubs in Dallas, Miami, Chicago, Los Angeles and New York. But it has been steadily losing ground to its rivals over the last decade while racking up losses that have totaled more than $12 billion in over 10 years.

US Airways has hubs in Phoenix, Philadelphia and Charlotte, and has a big presence at Washington’s National Airport.

Its shareholders will have to vote on the proposed merger.

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