LEGAL

Wednesday, April 2, 2008

LEGAL

Pet Food Settlement Reached

A pet food maker whose contaminated product may have led to the deaths of thousands of dogs and cats in North America has agreed to settle lawsuits with pet owners in the United States and Canada.

Amy W. Schulman, a lawyer for Streetsville, Ontario-based Menu Foods Income Fund, said she could not disclose how much the settlements would be worth. The company expects its total costs from last year's recall to be about $53.8 million. The agreement is subject to the approval of U.S. and Canadian courts, the company said.

Menu Foods began recalling food in March 2007, after cats and dogs that ate its products died of kidney failure. The Food and Drug Administration later found melamine, a chemical used to make plastics, in samples of Menu Foods' products.

ECONOMY

Bernanke Meets With Lawmakers

Federal Reserve Chairman Ben S. Bernanke met privately with House Republicans, and participants said he steered clear of saying that the country is in a recession. House Minority Leader John A. Boehner (R-Ohio) told reporters beforehand that the meeting was called because of "great concern about where our economy is headed."

Bernanke's meeting with House Republicans comes one day before he is slated to go to Capitol Hill to give lawmakers a fresh assessment of economic conditions.

RETAIL

Wal-Mart Drops Claim

Wal-Mart Stores is dropping a controversial effort to collect more than $400,000 in health-care reimbursement from a former employee who has been in a Missouri nursing home since she suffered brain damage in a traffic accident.

The retailer said in a letter to the family of Deborah Shank it will not seek to collect money the Shanks won in a lawsuit against a trucking company for the accident. Wal-Mart has been roundly criticized for its claim.

Pat Curran, executive vice president for human resources at Wal-Mart Stores U.S., wrote that Shank's extraordinary situation had made the company reexamine its stance.

INVESTING

CNet Leaders Assailed

Dissident shareholders called CNet Networks' leadership incompetent and lackadaisical in its latest efforts to steer the slumping technology news and entertainment company in a new direction. The criticism came in a 38-page assessment released by shareholders led by Jana Partners, a New York investment fund.

The unhappy investors, who hold nearly 15 percent of CNet shares, have been waging a three-month campaign to oust the San Francisco company's board.

By deploying better tools to sell more advertising and highlight CNet's listings in Internet search results, Jana says, the company can boost its earnings and restore much of the roughly $1 billion in shareholder wealth that has evaporated since December 2005.

Blackstone Raises $10.9 Billion

Blackstone Group, manager of the world's biggest leveraged buyout fund, raised a record $10.9 billion to invest in property as the U.S. housing slump pushes global real estate prices lower. The fund is Blackstone's ninth property pool.

That brings to $25.7 billion the total that Blackstone has gathered since 1992 to buy real estate, it said in a statement. The company is starting a separate fund of more than $1 billion for Western Europe.

Start-Up IPOs at Lowest Since '03

Initial public offerings for start-up businesses fell to the lowest level in almost five years in the first quarter as the stock market slump kept investors from providing capital to fledgling medical and technology companies. Only five start-ups backed by U.S. venture capital firms went public in the January-March period, the National Venture Capital Association said in a report. That's down from 31 in the fourth quarter of 2007 and 19 in the year-ago period.

Investors are backing off because they fear that profit estimates for new companies are too high, said Paul Bard, who follows IPOs for Renaissance Capital in Greenwich, Conn. The Bloomberg IPO Index, which measures the performance of stocks during their first publicly traded year, had fallen 22 percent this year before yesterday.

REGULATORS

Senators Seek Review of SEC

Two U.S. senators have asked for a review of the Securities and Exchange Commission's aggressiveness in fighting fraud. Sen. Jack Reed (D-R.I.) said that he and Banking Committee Chairman Christopher J. Dodd (D-Conn.) asked the Government Accountability Office to examine the SEC's enforcement division.

Reed sought the review after sanctions fell about 51 percent, to $1.6 billion, in the fiscal year ended in September.

BANKING

National City Reviewing Options

National City, a Midwestern bank heavily exposed to the worsening mortgage and housing market, confirmed that it is reviewing its options on rumors that it wants to find a buyer. Goldman Sachs has been hired to look into strategic alternatives, the bank said. National City has not confirmed that it is seeking a buyer and did not elaborate on what alternatives are being considered.

No further public comment on the review was expected until the company board comes to a decision, National City said.

Compiled from reports by Washington Post staff writers, the Associated Press and Bloomberg News.