American Airlines pleaded guilty to a felony and agreed to pay $8 million in fines after a two-year federal investigation uncovered widespread mishandling of hazardous cargo. Authorities found instances in which loads of paint, rum, poisons, chemicals and other flammable compounds were stowed on planes in violation of federal laws. American agreed in a settlement with the Justice Department to make sweeping changes to ensure safety.
Cendant will get a $400 million investment from Liberty Media, part of an agreement to develop television and Internet programming for Cendant's travel, mortgage, real estate and membership businesses. Liberty Media, a unit of AT&T, will get a 2.5 percent stake in Cendant and warrants to buy another 4 percent. Cendant stock jumped $6.25 a share, or 38 percent, to $22.68 3/4, on the New York Stock Exchange.
The Federal Aviation Administration said it plans to make the use of child restraints mandatory in all U.S.-registered aircraft through rules to be unveiled next year.
SBC Communications, the largest U.S. local telephone company, won Texas Public Utility Commission backing for its bid to offer long-distance service in the state. SBC and the regional phone companies are in a race to be first to break into the long-distance business. Bell Atlantic, the second-largest local company, has an application pending in New York. The Texas commission's 3 to 0 endorsement will be considered by the U.S. Federal Communications Commission, which will make a final decision after SBC files an application, which is expected to be early next year.
Phillips Petroleum and Duke Energy agreed to combine their natural-gas processing businesses into a separately traded company. Duke and Phillips plan to sell 20 percent of the new company, to be called Duke Energy Field Services, to the public in an initial offering in the first half of next year. The companies will each receive $1.2 billion in cash from the new enterprise, which will borrow money to make the payments.
Phil McConkey, a former New York Giants football player, won a $10 million verdict in his lawsuit alleging that he was lied to by former boss Frank G. Zarb, who is now the head of the National Association of Securities Dealers. McConkey said he took a job selling insurance for Alexander & Alexander Services only after Zarb, then the firm's chairman, assured him that rumors that the company was for sale weren't true. Seven months later, in December 1996, the company was sold to Aon, which fired McConkey to cut costs, the suit said. The damages will be assessed against the two companies.
Krispy Kreme Doughnuts filed with the Securities and Exchange Commission to raise as much as $75 million through an initial public stock offering. Krispy Kreme said it will use the proceeds to remodel and relocate older stores, repay debt, and expand its capacity to make doughnut mix.
The IRS made it easier to repurchase stock after undertaking a tax-free acquisition, ensuring that companies won't have to put popular buybacks on hold while pursuing takeovers. The Internal Revenue Service issued a formal ruling that a stock-and-cash acquisition can remain tax-free while the acquiring company buys back shares up to the number it issued in the takeover.
Martin Armstrong, a market forecaster accused of defrauding Japanese investors, is hiding more than $16 million worth of gold bars, rare gold coins and a bust of Julius Caesar, a court-appointed trustee in the case said in a motion asking that Armstrong be held in contempt for refusing to turn over the assets.
FDX, the parent company of Federal Express, said fiscal second-quarter earnings fell 7 percent, to $171 million, as jet-fuel costs rose and U.S. shipments grew less than forecast.
Nike said its fiscal second-quarter profit rose 56 percent, to $107.5 million, boosted by increased sales of basketball shoes and strong demand for its products overseas.
AES, an Arlington-based company that builds and operates electric power plants worldwide, began construction of a coal-fired facility in Puerto Rico that is expected to supply about 15 percent of the island's electricity needs. The $800 million plant, expected to begin operating in mid-2002, will to be the cleanest coal-fired power plant in the world, the firm said.