United Parcel Service was ordered by the U.S. Tax Court to pay $14.5 million in penalties plus an undetermined amount of back taxes and interest on income from 1983 and 1984. Atlanta-based UPS still faces a decision on similar issues involving as much as $259 million in revenue from 1985 through 1990. The package-delivery giant, which is in the midst of going public, had challenged a tax bill relating to $67.2 million in revenue from a Bermudan affiliate, which provided reinsurance to unrelated companies that sold insurance to UPS customers. "UPS believes there is grounds for appeal," spokeswoman Susan Rosenberg said.
Stride Rite said it plans a restructuring that will eliminate about 125 administrative positions and cut costs by $9 million a year. The Lexington, Mass., footwear company said it will take a third-quarter pretax charge of $3 million to cover the changes. Stride Rite's board also authorized the repurchase of 2 million shares in the open market or through private transactions. The company had about 46.4 million shares outstanding on July 19.
American Bar Association delegates voted at their annual meeting to delay the consideration of new rules that would allow lawyers to share profits with non-lawyers. The vote means that one-stop shopping for lawyers and accountants won't be a reality any time soon. Many lawyers at the meeting, held in Atlanta, were worried that commingling the professions would erode the legal industry's ethical standards and ultimately reduce their autonomy. Delegates decided they needed to study the matter further.
Qwest Communications International announced free Internet access for consumers who purchase a special long-distance package, one day after MCI WorldCom unveiled its "5 Cents Everyday" campaign. For $24.95 a month, Qwest program subscribers will receive unlimited Internet access plus 250 minutes of domestic long-distance calling. If subscribers make more than 250 minutes of calls, they are charged a dime a minute.
Microsoft, meanwhile, said it is offering Internet access at a 40 percent discount to the 13.1 million members of Costco, the largest U.S. chain of warehouse-club stores. Three months of MSN service will cost $35.97, or $11.99 a month, compared with the regular fee of $19.95 a month. Microsoft said last week that it's considering options for trimming Internet access fees as it competes with leading provider America Online.
AT&T, the second-largest U.S. cable-TV operator, argued that it should not be forced to allow rivals such as America Online to use its cable systems for Internet access in Portland, Ore. AT&T said Congress has already passed laws prohibiting local governments from forcing cable companies to open their lines. Earlier this year, Oregon officials approved the transfer of Tele-Communications Inc.'s cable-TV franchise to AT&T on the condition that TCI's cable system be opened for use by outside Internet access companies. AT&T sued to overturn that condition and later appealed after a federal judge denied the lawsuit in June.
General Motors said it will unite its online car-buying Web site and onboard information services under a new unit to exploit the Internet and increase revenue beyond car sales. Sun Microsystems will link and improve GM's Web sites for the new business, called e-GM, and develop a voice-activated Internet system.
Blockbuster raised $465 million in an initial public offering of stock. The chain of videotape-rental stores, owned by Viacom, sold 31 million shares to the public at $15, $1 below the $16 to $18 range set before the sale. The IPO represents an 18 percent stake and valued Blockbuster at $2.63 billion.
Global Crossing's shares slumped to an almost six-month low, raising the possibility that the builder of a worldwide fiber-optic network will revise its $12.9 billion planned purchase of long-distance provider Frontier Corp. The company's shares fell $2.56 1/4, to $28.12 1/2, or 19 percent below the range in which the stock must trade before completion of the transaction.
Personal bankruptcies declined 2 percent, to 345,956, in the past year, the first decrease since 1995, the Administrative Office of the U.S. Courts said.
Ford asked a California judge to throw out a $295 million verdict against the automaker stemming from a 1993 accident in which a Bronco rolled over and three members of a family died. The company argued that the jury lacked grounds to award punitive damages and mistakenly decided that the sport-utility vehicle's removable fiberglass roof led to the deaths. The verdict last month included $290 million in punitive damages and $5 million in compensatory damages.
Georgia has begun an investigation into whether two Atlanta brokerages violated laws in dealing with a day trader who shot dead nine people in a rampage sparked in part by market losses. Secretary of State Cathy Cox said she issued subpoenas Monday to Momentum Securities and All-Tech Investment Group. Cox said she wants to know whether the brokerages adequately warned trader Mark Barton and others about the risky nature of day trading.
Bank of America said it will fund a $3 billion mortgage program for low- to moderate-income borrowers that promises no down payment, no application fee and no closing costs. The national program will be overseen by Boston-based Neighborhood Assistance Corp. of America, led by Bruce Marks.
Yahoo and Hewlett-Packard are teaming up to offer services to create corporate Web sites that employees can use to find job-related information. Terms of the agreement weren't disclosed. The two companies will charge a pay-as-you-go subscription for the service, which will allow users to access proprietary corporate information such as employee directories, accounts-payable data and industry news through a Web site designed especially for their company.
Soros Fund Management, a group of hedge funds run by billionaire financier George Soros, has named Duncan Hennes to the new job of chief executive, to free the firm's chief investment strategist, Stanley Druckenmiller, from administrative duties. Hennes, 42, was previously treasurer of Bankers Trust but left after the bank was bought in June by Germany's Deutsche Bank.
INTERNATIONALNissan announced plans to begin production in February of a gasoline-powered car that emits less pollution during a 20-mile commute than a typical new car sitting all day in a driveway with the engine shut off. (Even without the engine running, cars produce pollution through evaporation of fuel.) The Japanese automaker said it has begun the final process of winning approval for the new engine from the California Air Resources Board. Nissan is the latest automaker to announce plans to produce what are know as super-ultra-low- emission vehicles to meet California's stringent pollution standards.
Mexico's foreign credit rating was raised to one notch below investment grade by Moody's Investors Services, a move that is likely to reduce government and corporate borrowing costs. The rating agency raised Mexico's long-term foreign currency country ceiling for bonds and notes to "Ba1," with a positive outlook, from "Ba2." The review marks the first upgrade of Mexico's rating by any of the three largest rating agencies since 1990.
Brazil central bank is withdrawing a formal request to the world's biggest banks to maintain their trade and interbank lines to the country, a sign that policymakers are confident the country's economy is rebounding.
Sumitomo filed a $735 million lawsuit against J.P. Morgan & Co., demanding compensation for its role in a scandal in which a Sumitomo copper trader lost $2.6 billion. The lawsuit was sealed, though a cover sheet spelled out the amount demanded by Sumitomo and allegations it was making against J.P. Morgan. They included fraud, racketeering, negligence, breach of duty, aiding and abetting, and conspiracy.
RECALLS Root-Lowell Manufacturing is recalling 90,000 home and garden sprayers with pump assemblies that can spontaneously eject from the sprayers and cause injuries, the Consumer Product Safety Commission said. The recall only affects the one-gallon, pump-style sprayers made by the Michigan company. They were sold from January through July.
EARNINGSCisco Systems said fiscal fourth-quarter profit rose 29 percent, to $635 million, driven by sales of Internet equipment to phone companies and small and mid-size businesses.
Wal-Mart Stores said its second-quarter profit climbed 21 percent, to $1.25 billion, as continued robust consumer spending pushed sales 15 percent above year-earlier levels. Earnings for the retailer rose despite being hindered by a large court settlement with a Mexican grocery-store chain.