10A NEWS
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THE UNIVERSITY DAILY KANSAN
THURSDAY, SEPTEMBER 11, 2008
SUA
Project Runway contest open
ASSOCIATED PRESS
Students can still submit work to design competition
Fashion designer Christian Siriano, winner of Bravo's latest "Project Runway" competition, appears onstage during a taping of MTV's "Total Request Live" at the MTM Times Square Studios in New York. Siriano will judge the final score of SUA's Project Runway competition.
BY KELCI SHIPLEY kshipley@kansan.com
The University of Kansas doesn't have a fashion design program, but that doesn't mean it doesn't have its fair share of fierce designers.
Student Union Activities is planning its third annual Project Runway competition to determine who is in - and who is out.
The preliminary challenge began Sept. 2, but the deadline for this stage is 5 p.m. Sept. 29. Grace Sha, cultural arts coordinator for SUA, said designers were still encouraged to apply. Preliminary round contestants must construct their garments using only brown paper bags from Dillons grocery store.
This year, the celebrity guest judge will be Christian Siriano, the winner and fan favorite of Bravo's season four of "Project Runway." Siriano will help judge contestants in the competition's finale.
"He's fantastic," said Julian Rivera, Lenexa senior and designer in the running. "I always agree with him but it's a little different when he's judging you."
Siriano was known for his catty commentary and fierce fashion while on the show. Michelle Compton, student development advisor for SUA, said she thought Siriano would "be a wonderful speaker and entertaining judge."
Rivera is working with long-time friend Mollee March, also a Lenexa senior, for this year's competition.
"Mollee and I have been making clothes and costumes for three or four years and we're very excited about working together," he said.
Aside from making it to the finale, Rivera said their main concern was making their paper-bag dress dramatic enough to stand out from other contestants' garments.
"It has to be wearable but eyecatching" he said.
Rivera said working with the quirky assigned material was challenging.
"It's been easier to sew than I thought, but the problem is the movement of the garment," he said. "You have to find the key elements of the bag and retain its structure."
SUA's cultural arts committee will judge the competition's preliminary and final rounds.
In the past, only individual designers were allowed to participate, but Michelle Compton, student development advisor for SUA, said organizers decided to allow partnerships.
"One person can design while the other sews, that way they don't have to tap into something they're not comfortable with," Compton said.
Rivera said he was excited to collaborate with and get help from long-time friend March.
"She knows how things are supposed to fit and what's flattering on a woman's body," he said.
The finale will take place at 7
p. m. Nov. 11 in the Kansas Union Ballroom, giving designers a little over a month to complete the challenges. Judges will base their decisions on the categories of execution, difficulty, creativity and aesthetic design, according to the event's preliminary rules.
Sha said organizers were excited for the competition and hoped for increased success over last year's competition.
"We want students to participate and have fun," Sha said. "Ultimately it's a good time, and a good experience that provides challenge and entertainment."
Organizers said if students had ever dreamed about showing a collection in the white tents of Bryant Park on the real "Project Runway," SUA's Project Runway might be a launching pad.
Just grab an application, a few brown paper bags, and make it work.
- Edited by Brenna Hawley
NATION
Investment bank reports $4 billion loss
Third-quarter losses draw criticism for Lehman Bros. CEO
BY JOE BEL BRUNO ASSOCIATED PRESS
"This is agonizing for share-
holders," said Mark Williams,
*Pedestrians walk past Lehman Brothers headquarters on Wednesday in New York. Lehman Brothers Holdings Inc., the nation's fourth-largest investment bank, has had its shares fall more than 80 percent this year as investors lost confidence amid mounting losses.*
For investors, the strategy Fuld presented seemed long on hope, short on details and raised questions about timing and execution, analysts said. Investors had hoped to see a solid plan in place to offset nearly $6.5 billion of losses during the past two quarters.
ASSOCIATED PRESS
Fuld, the longest serving CEO on Wall Street, also said the firm would examine all other options including a sale of the company he joined right out of college. Finding a buyer might preempt any hostile takeovers now that Lehman's stock has plunged from $67.73 a year ago to $7.25 Wednesday, giving it a shrunken market capitalization of $7.6 billion.
"If anybody came with an attractive proposition that was compelling for shareholder value, it would be brought to the board, discussed with the board, and evaluated." Fuld said on a conference call. "We remain committed to examining all strategic alternatives to maximize shareholder value."
NEW YORK — Lehman Brothers put itself on the block Wednesday as part of a last-ditch effort to rescue the investment bank from bad bets on real estate-related holdings that have already laid low other storied Wall Street firms.
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The 158-year-old company's chief executive Dick Fuld, known as "the gorilla" for his bloody-minded approach to investment banking, outlined a plan to sell off Lehman's well-respected investment management unit and spin off its commercial real estate assets after it reported an almost $4 billion third-quarter loss.
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a professor of finance at Boston University School of Management. "Fuld was supposed to have a war room started in March, when Bear Stearns nearly collapsed, to solve these problems, and at this point he has failed miserably."
The nation's fourth-largest investment bank plans to sell a 55 percent stake in its investment management division, which includes its prized Neuberger Berman asset management unit. Lehman said it is in advanced talks with several bidders, but refused to give a timeline about when a deal would take place.
Investors were discouraged that no buyer had been named. Lehman began pitching a deal to private-equity firms two months ago. Analysts believe the sale could fetch about $3 billion.
Further, the firm is also taking a big bet that a spin-off of its commercial real estate assets will get a strong market reception in early 2009. The new entity will be called Real Estate Investments Global, and will be run by an independent management.
Williams believes that Fuld now has a limited amount of time, perhaps until Monday, to unveil a bona fide deal or run the risk of
shares tumbling even further. And, he said, that could lead to a worst case scenario where rumors about the company cause anxious trading partners to pull business — a scenario that felled Bear Stearns six months ago.
Wall Street
Compounding anxiety is that Lehman, unlike smaller rival Bear Stearns, might not be able to count on a lifeline from the government. Any Fed intervention on behalf of Lehman would heighten concerns about the central bank's role in encouraging so-called "moral hazard," where financial firms would be inclined to take extra risks because they believe the government will bail them out of their messes.
Global banks have lost more than $300 billion from write-downs since the housing slump evolved into a full-blown credit crunch. Many on Wall Street believe another major bank failure is probable.
remains skittish about financial stocks since a run on Bear Stearns caused the U.S. government to orchestrate its sale to JPMorgan Chase & Co. in March. Lehman, the biggest U.S. underwriter of mortgage-backed securities, was automatically scrutinized.
Unlike Bear Stearns, though, Lehman Brothers has access to funds from the Federal Reserve through the central bank's discount window. The government has permitted investment banks to borrow money to cover short-term needs, an ability that only commercial banks had in the past. The borrowing could buy Lehman some time while it works out its restructuring.
"Every other major Wall Street bank was trying to duplicate the Lehman model that Fuld created. He is extremely wellliked and respected inside and outside the firm."
BRAD HINTZ Financial analyst
Fuld also is one of the most respected and popular bankers on Wall Street. He led his firm back from major capital shortages during the financial crisis in 1998. Analysts said he inspires confidence that he can reinvent the bank despite one of the worst economic climates since the Depression.
"Every other major Wall Street bank was trying to duplicate the Leman model that Fuld created," said Brad Hintz, an analyst with Sanford C. Bernstein and a former Leman chief financial officer."He is extremely well-liked and respected inside and outside the firm."
The uncertainty showed up Tuesday in the cost for insuring Lehman's debt against default. The insurance, known as credit default swaps, rose to 6.10 percentage points from 4.75 percentage points
Arrayed against the plan: the current financial crisis shows no sign of ending soon, credit conditions remain tight and big acquisitions are rare. Big institutional investors — like state-owned sovereign wealth funds and private-equity firms — aren't as willing to make major investments.
after Lehman rolled out its strategy. Those insurance costs are now greater than those of Bear Stearns shortly before was rescued by a Federal Reserve-backed plan in March.
Leh man shares, which shed 54 cents
to $7.25 Wednesday, tumbled another 6.9 percent in after-hours trading.
The contagion spread to other financial companies. Washington Mutual Inc. plunged 74 cents, or 22.4 percent, to $2.56 after setting a multiyear low of $2.30 earlier. WaMu, among the banks hit hardest by the housing mess, has seen the value of its shares plunge 76 percent this year, as it battles rising mortgage delinquencies and defaults.
Shares of Citigroup Inc., JPMorgan, Bank of America Corp., and Wachiovia Corp. also fell.
Lehman Brothers' current crisis came to a head on Tuesday when its shares plunged almost 50 percent after reports that the head of South Korea's financial regulator said talks about a possible investment had ended. Fuld had been in negotiations with state-owned Korean Development Bank for several weeks about a capital infusion.
Analysts have speculated that Fuld was overvaluing the firm.
On the conference call, Fuld blamed rumors and speculation for hurting the stock price. He also confidently predicted employees will hang in there: "We've been through adversity before," he said.