US Airways' new board of directors selected David G. Bronner, chief executive of the Retirement Systems of Alabama, as chairman. The pension fund controls eight seats on the airline's board and 38 percent of its stock. The fund provided a $240 million investment and $500 million in financing that helped the airline emerge from Chapter 11 bankruptcy protection this week after eight months. US Airways chief executive David N. Siegel will continue to run day-to-day operations.
HealthSouth Scandal Grows
HealthSouth faked about $2.5 billion in earnings, or almost twice as much as previously alleged, according to new government claims. Documents filed by prosecutors show that the health care giant overstated earnings by $440 million in 1997 and $635 million in 1998. That's in addition to the $1.4 billion in inflated earnings since 1999 that the Securities and Exchange Commission alleged last month.
The U.S. government is investigating the role of Mobil Oil, a unit of Exxon Mobil, in a scheme to bribe leaders of Kazakhstan in return for oil rights in the nation, a prosecutor said. Assistant U.S. Attorney Peter G. Neiman made the remarks about the investigation during a court proceeding at which oil consultant James H. Giffen pleaded not guilty to charges that he paid more than $78 million in bribes to Kazakh leaders in six oil transactions, including Mobil's purchase of a 25 percent stake in Kazakhstan's Tengiz field.
A U.S. bankruptcy judge approved a recovery plan for FAO, owner of the FAO Schwarz and Zany Brainy toy chains, clearing the way for the company to emerge from Chapter 11. As part of its reorganization, FAO closed some stores and laid off employees. FAO also plans to sell toys at 245 Saks stores.
Ford said it will stop leasing vehicles in New York in early July because of state laws that allow a leasing company to be held liable for car and truck accidents. Leasing companies might be held liable for several billion dollars because of the law, said Ford Motor Credit, the automaker's consumer-finance unit.
Hewlett-Packard shareholders, rejecting management recommendations, narrowly adopted a measure requiring their approval of executive severance packages that are more than 2.99 times the person's salary and bonus. Shareholders earlier passed a measure requiring their approval of anti-takeover measures.
Anthony Chrysikos, a former vice president of General Electric Capital, was sentenced to 15 months in prison after pleading guilty to disclosing to an investor the prospective acquisition of Heller Financial in 2001.
MCI Group, a subsidiary of WorldCom, said it is hiring 400 people for its voice and data services group. Jobs are available in Michigan, Illinois, Ohio, Indiana, Wisconsin, Virginia, Maryland, Pennsylvania, New Jersey, New York, Rhode Island and Massachusetts.
AES, which produces electric power in 30 countries, plans to sell about $1 billion in notes to pay off bank loans and retire other debt at a discount. The second-priority, secured notes will be sold in a private placement and will fund an offer to buy $525 million in senior and subordinated notes for 67 to 92 cents on the dollar, AES said. The Arlington-based company plans to pay off $475 million in bank debt scheduled to mature next year.
Alcoa said its first-quarter profit fell 31 percent, to $151 million, because of losses on divestitures and other expenses. The Pittsburgh-based aluminum maker said sales rose to $5.11 billion from $4.9 billion a year earlier.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers