$1.28m in grants to bolster foreclosure counselors

Massachusetts has received $1.28 million in federal grants to support counselors helping delinquent borrowers avoid foreclosure. The money comes from foreclosure mitigation efforts Congress included in the housing legislation passed this summer. Among local recipients, MassHousing, the state's affordable housing bank, received $407,340 to be distributed among a number of nonprofit counseling agencies. Other recipients include: $200,700 to Neighborhood Housing Services of the South Shore Inc.; $113,940 to the Springfield Neighborhood Community Development Corp.; and $113,000 to the Urban Edge Housing Corporation of Boston. Foreclosures in Massachusetts surged 67.5 percent to 10,603 during the first 10 months of the year, according to the real estate tracker Warren Group. (Jenifer B. McKim)

Schultze Asset Management, the owner of bankrupt Tweeter, said it mailed out unpaid wages - but not vacation time owed - to roughly 600 employees who were abruptly fired this week just days before the business was set to close. Liquidators running a going-out-of-business sale for the electronics chain have also recovered most of their fees, totaling more than $1 million. The group of businesses, including local companies Hudson Capital Partners and Tiger Capital Group, are asking the bankruptcy court to reopen the stores so customers who have paid for merchandise can pick up their goods. It is still unclear whether liquidators will pay employees bonuses that were promised as part of the going-out-of-business sale. Tweeter, which received approval yesterday to liquidate under Chapter 7, had initially planned to close its shops tomorrow. (Jenn Abelson)

State Street Corp., the largest money manager for institutions, had the rating outlook for its debt lowered by Standard & Poor's because of the impact of falling markets on revenue. The outlook was changed to "negative" from "stable" to reflect poorer short-term prospects for revenue from the Boston-based company's investment servicing and asset management businesses, S&P said. State Street's counterparty credit rating was unchanged at AA-/A-1+. State Street said this week it will cut about 1,700 jobs, or 6 percent of its workforce, because of the bear market's impact on profits. State Street had $14.1 trillion in assets under custody as of Sept. 30, down 6.9 percent this year. (Bloomberg)

Genzyme Inc.'s new version of its Synvisc injection was better than a placebo at relieving arthritis pain in the knee, according to the staff of the Food and Drug Administration. Still, the 253-patient study may have been too small to detect slight differences between the two groups, the FDA staff said in documents posted on the agency's website. The new product, Synvisc-One, requires a single shot to ease knee pain for six months, according to Genzyme. The version of Synvisc already being sold in the United States requires three injections a week apart. (Bloomberg)

Shareholders of Merrill Lynch & Co. and Bank of America Corp. approved the investment bank's sale to Bank of America, a move that will create the nation's largest financial services firm. During a special shareholders meeting at company headquarters in New York, Merrill shareholders approved the sale, bringing to an end the independence of an investment bank founded in 1914. Bank of America shareholders approved the deal later in the day, but a majority of those who spoke at the meeting disapproved of the merger, saying it was risky. Bank of America's stock has fallen 63 percent this year as the credit crisis wears on. (AP)

Walgreen Co., the largest US drugstore chain, recalled 173 teddy bears with chocolate bars sold since September after the Food and Drug Administration discovered some samples of the candy were contaminated with melamine. No injuries or illnesses have been reported, Walgreen said. (Bloomberg)