New York Post, Tuesday, August 6, 2019
nypost.com
By SOMA BISWAS
and JULIET CHUNGBarneys New York is pre-
paring to file for bank-
ruptcy and nearing an
agreement with lenders for
a financing package that
would give the luxury re-
tailer time to find a buyer,
according to people familiar
with the matter.
The restructuring plan
under discussion calls for
Barneys, which operates 13
department stores and nine
warehouse stores, to imme-
diately shut down most of
its locations and look for a
buyer for seven core stores,
sources said. Barneys could
seek court protection as
soon as Monday evening.The company is close to a
deal with Gordon Brothers
and Hilco Global, firms that
specialize in selling assets
for distressed companies,
which would provide a loan
to fund the company’s stay
in bankruptcy for 60 days
while it attempts to clinch a
deal with a buyer, according
to one of the people.
If Barneys cannot reach a
deal, it will liquidate, the
sources said.
“The Barneys New York
board and management
continue to work ... with a
number of parties and are
committed to reaching a
mutually agreeable resolu-
tion to strengthen our busi-
ness,” a Barneys spokesman
said Monday. Dow JonesT
HE IRS is coming after crypto-
currency traders. And the gov-
ernment isn’t being nice about it.
I’m tight on space today, but let
me give you a taste of this very
important story.
At the end of July, the IRS
started sending letters to people
who trade cryptocurrencies like
bitcoin, reminding them that they
owed taxes on any profits they
may have made.
The IRS sent out three letters.
The harshest was Letter 6173,
which starts, “We have informa-
tion that you have or had one or
more accounts containing virtual
(crypto) currency and may not
have met your US tax filing and
reporting requirements.”
“Virtual currency is considered
property for federal income tax
purposes,” the letter said.
There were two other letters —
6174A and 6174 — that were milder
in tone. Experts say the last two
letters imply that something canbe worked out between the trad-
ers and the IRS.
Letter 6173 does not and gives
instructions on what the recipi-
ents “need to do by the ‘respond
by’ date above.” I have blank cop-
ies of the letters, so no “respond
by” date is filled in.
Lou Vlahos, a partner with the
law firm of Farrell Fritz, says the
fact that Letter 6173 has a re-
sponse date “tells us that the IRS
has some pretty good information
(people who got this letter) did
not properly report their income
or their gains from these virtual
currency transactions and that
they did not pay the tax.”
The IRS said in 2014, for the first
time, that virtual currencies
would have general tax principles
applied. In 2018, the IRS an-
nounced a “compliance cam-
paign” that sounded more like ed-
ucation than anything else.
“I think this is the follow-up,”
says Vlahos, who added that this
is now the IRS playing hardball.
And not only is the IRS looking
for taxes that are due, but also
people who lie will be subject to
perjury charges, says Vlahos.
As I’ve been telling readers,
cryptocurrenices like bitcoin are a
confidence game — a con — thatare only worth something because
people have confidence that they
are worth something. When that
confidence erodes, cryptocurren-
cies will disappear.
While these virtual currencies
are also very handy for criminals
and rogue nations that want to do
business anonymously, many in-
vestors have also made a lot of
money (and also lost a lot) trading
things like bitcoin.
But the biggest lure was the fact
that traders thought they could
make money and not pay taxes.
The IRS is now telling them
that’s not so.
Virtual currency traders will
probably laugh at the idea that the
IRS and the US government are
coming after them because their
transactions are — they believe —
untraceable.
But that’s not the case, and cryp-
tocurrency traders should be wor-
ried. CoinBase is a platform that
brags it has allowed millions of
people to buy and sell cryptocur-
renies. Last year, the US govern-
ment won a court order for Coin-
Base’s customer list.
While I can’t be certain, I will
bet that CoinBase’s customers are
the ones getting those IRS letters.
And court orders for other cryptotrading platforms can’t be far be-
hind.
Now, what’s a president to do?
President Trump made a big
bet when he said last week that he
was going to impose stiff tariffs on
billions of dollars worth of Chi-
nese-produced goods.
And, just days later, the Chinese
counterattacked by allowing their
currency — the yuan — to fall
sharply in value. That makes Chi-
nese goods cheaper and offsets
the tariffs.
Let’s also not forget
that the Chinese, along
with the Japanese, are
the largest lenders to
the US. China owns
over $1.1 trillion
worth of US govern-
ment securities and
could cause interest
rates in America to rise if it
became a sloppy and aggressive
seller of those bonds.
The US bond market is what
Trump ought to be worried about
since he wants interest rates
lower and the Chinese could
cause them to rise sharply.
But our president is probably
more concerned with what the
stock market is doing. Stockprices have been sliding ever
since Trump announced last week
that he was going to put tariffs in
place on more Chinese goods.
Trump isn’t happy with the way
trade talks with the Chinese are
going. And he should be unhappy
since the Chinese are trying to
rope-a-dope him until next year’s
presidential election.
The Chinese are hoping Trump
loses, and they can deal with
someone else on trade issues.
But last week’s stock market
weakness was nothing compared
to Monday’s when the Dow
Jones industrial average
fell 767 points to 25,717.
Wall Street’s reaction to
all this is exactly what
the Chinese want —
and Trump doesn’t —
since our president has
always been very con-
cerned about what the stock
market is doing.
That makes me remember my
last face-to-face conversation with
Trump, which happened before he
got the title. I warned that he
should be careful about creating
trade wars and Trump simply
said, “Don’t worry.”
Huh?! I wonder if he’s worried
now. [email protected]By KEITH J. KELLYThe nation’s largest news-
paper chain just got a whole
lot bigger.
The parent of the nation’s
second-largest newspaper
company, Gatehouse Media,
has struck a $1.38 billion
agreement to acquire USA
Today publisher Gannett in a
cash-and-stock deal.
The merger, which would
combine Gannett with
Gatehouse’s publicly traded
New Media Investment
Group, was formally un-
veiled Monday following
months of negotiations. It
calls for Gannett’s share-
holders to receive $6.25 in
cash and 0.5427 worth of
New Media shares for each
share of Gannett.
With assumption of Gan-
nett debt, Apollo Global
Management will supply all
$1.792 billion in financing,
which one source told The
Post was at a sky-high 11.5
percent interest rate.
The deal to merge Gate-house with Gannett — al-
ready the biggest newspaper
chain in the country in terms
of circulation — will form a
behemoth that will operate
more than 250 daily papers,
or one-sixth of all newspa-
pers in the country. The com-
pany will retain the Gannett
name and the company’s
McLean., Va., headquarters.
Locally, Gannett owns
northern NJ’s Record and the
Journal News in NY’sWestchester and Rockland
counties. Gatehouse owns
mostly smaller papers.
One of the big winners in
the deal is Fortress Capital,
which took Gatehouse
through a bankruptcy in 2013
that shed most of its debt.
New Media’s CEO Mike
Reed then gobbled up small
US newspaper companies.
Fortress reaped lucrative
management fees along the
way — to the tune of $21.8million in 2018.
Under terms of the agree-
ment, the fee deal will sunset
in two years.
“It’s interesting that Gan-
nett never declared bank-
ruptcy but it is Gatehouse
that is buying them,” noted
Ken Doctor, whose Newso-
nomics column predicted the
deal would be unveiled on
Monday.
Josh Kosman contributed
to this story.Headline news
The company buying USA Today publisher
Gannett will own one-sixth of all newspapers
in the nation when the deal is completed.Papers in the bag
Gatehouse strikes $1.4B Gannett deal
Barneys may
be goin’ belly up
Made money on bitcoin? IRS wants a bite!
JOHN
CRUDELE
BloombergLet’s also not forgetweakness was nothing compared
to Monday’s when the Dow
Jones industrial averagerates in America to rise if itGet more
John Crudele at
NYPOST. COM
Videogame publisher Take-Two Interactive raised its full-
year revenue forecast, based on the success of its games “NBA
2K,” “Grand Theft Auto V” and “Red Dead Redemption 2.”
Investors rewarded the publisher by sending shares up 7.1
percent in late trading Monday, to $123.60
The company has prevailed over challenges posed by free,
mobile-based games with its highly popular offerings.ReutersTake-Two takes off