DaimlerChrysler has decided to sell its 10.5 percent stake in South Korea's Hyundai Motor and is sharply scaling back other aspects of their four-year-old partnership, the companies said. Hyundai has been one part of DaimlerChrysler chief executive Juergen Schrempp's effort to build a global auto giant with a presence in major markets worldwide. But that effort suffered a blow last month when DaimlerChrysler distanced itself from another Asian partner, Mitsubishi Motors, by refusing to put more money into the debt-laden company. It still owns 37 percent of Mitsubishi, however.
Drug Executive to Stick by Plea Deal
Former Rite Aid chief executive Martin L. Grass has decided to proceed with a guilty plea related to a widespread accounting fraud at the drugstore chain, a court official said. Defense lawyers for Grass and federal prosecutors in Pennsylvania are preparing a new plea agreement to be filed with the court today, according to Mark Armbruster, a courtroom deputy to U.S. District Judge Sylvia H. Rambo. Rambo recently signaled that a previous deal that would have sent Grass to prison for no more than eight years was too lenient. Details on the new agreement could not be determined and both sides declined comment.
The House passed a bill to allow people who deposit some of their salaries in tax-free health expense accounts to roll unused funds over to the next year or into long-term health savings accounts. The bill was one of three related bills that Republicans are pushing during a week of heightened attention to health care and the uninsured. All three have previously passed the Republican-led House, but have been blocked in the Senate.
A House Financial Services subcommittee, challenging U.S. accounting standard-setters, approved a bill to require companies to list only those stock options given to the top five executives as an expense to be deducted from earnings. Technology companies such as Intel and Taser International oppose a plan by the Financial Accounting Standards Board to require companies to count options granted all employees as an expense. Even if the bill wins House passage, it probably will die in the Senate, where Banking Committee Chairman Richard C. Shelby (R-Ala.) opposes it.
House Republicans rebuffed a Democratic attempt to force an election-year vote on the Bush administration's new overtime pay rules. The 222-205 vote blocked a move by Rep. George Miller (D-Calif.) to force the House to vote on a provision to require the new regulations to retain eligibility for all workers who currently qualify for overtime pay.
Richard M. Scrushy's fraud trial probably will be delayed because of conflicts in his lawyer's schedule, the lawyer said. The fired HealthSouth chief executive is scheduled to go on trial Aug. 23 on an 85-count indictment accusing him of making millions of dollars by inflating HealthSouth earnings for years. But defense lawyer Abbe Lowell said he has to be in Mississippi for another fraud trial set to begin Aug. 16.
Merrill Lynch was fined $625,000 by the New York Stock Exchange after former analyst Peter Caruso was accused of giving some clients advance notice about his rating cut for Home Depot. The exchange said that the investment firm did not adequately supervise Caruso and will strengthen its policy on analyst disclosures to settle the case. Merrill fired Caruso on Aug. 20, 2003, saying he violated the firm's policy against advance disclosure of rating changes.
Henry Yuen, Gemstar-TV Guide International's former chief executive, may collect a $29.5 million severance payment that was frozen by the Securities and Exchange Commission, a federal appeals court ruled. The U.S. Court of Appeals for the 9th Circuit in San Francisco reversed a lower court's decision that granted the SEC's request to freeze the combined $37.6 million severance of Yuen and Elsie Lueng, Gemstar-TV Guide's former chief financial officer.
Lawyers who persuaded Microsoft to settle a class-action California antitrust suit are asking the court for a record $258 million in legal fees. Lead attorney Eugene Crew told San Francisco Superior Court Judge Paul Alvarado in legal briefs that he alone plans to seek $18.5 million, about $3,000 per hour. Crew wrote that attorneys deserve five times their normal rate because of the difficulty of maneuvering through the legal system to recover money for consumers. In such suits, attorneys negotiate fees with the losing party and the judge.
Eastman Kodak will maintain its independence as it shifts focus from traditional film to health and digital imaging, chief executive Daniel Carp told shareholders at the company's annual meeting in Rochester, N.Y., where Kodak is based. Also at the meeting, shareholders rejected a measure calling for the elimination of stock options, severance packages and other extra compensation for Kodak's top five executives.
Merrill Lynch and Allegheny Energy Services both want the $43 million that Daniel Gordon embezzled from Merrill, lawyers for the two companies told a federal judge. Gordon, once Merrill's chief energy trader, was ordered to forfeit the money after pleading guilty in December to money laundering and wire fraud. The funds were originally meant to purchase an insurance policy for a Merrill energy unit that was later sold to Allegheny. But Assistant U.S. Attorney Jane Levine, who prosecuted Gordon, said the companies' claims are a civil matter.
U.S. cigarette makers may yet have to pay a record sum of money to Florida smokers. The Florida Supreme Court said it would review a lower court's voiding of a $145 billion verdict against the manufacturers, which include Altria and R.J. Reynolds. Representatives of the plaintiffs and the cigarette makers were not immediately available for comment.
Principal Financial Group said it has agreed to sell its mortgage banking business to Citigroup in deal worth $1.26 billion. The transaction is expected to close in the third quarter, subject to regulatory approval, the company said.
Wal-Mart said customers can now cash preprinted payroll or government-issued checks at stores in 44 states. Licensing is pending in the remaining states of Connecticut, Massachusetts, New Jersey, Nevada, New York and Rhode Island. Wal-Mart said it will charge $3 to cash the checks, except in states where law requires a percentage-based fee. In those states, the charges won't go above $3.
DPL's chairman says he turned over all relevant information for a review of top management by investigators, who said they found hundreds of files were erased from his personal laptop computer. Peter Forster said that his computer contained some personal materials unrelated to DPL. He said his lawyer reviewed all of the files, printed those related to DPL and gave them to investigators.
NASD is forming a task force aimed at prodding mutual funds to explain the fees they charge investors and the incentives they pay brokers. The group, which will be appointed by the end of June, will examine how funds make hidden incentive payments to brokers and how their annual sales and marketing fees are assessed, said Robert R. Glauber, chief executive of the self-regulating securities association.
The International Energy Agency warned that the economic recovery could fizzle unless suppliers keep pace by drilling new wells and producing fresh crude, as demand for oil is growing at its fastest rate in eight years.
The Paris Club of creditor nations agreed to cancel all $152 million owed by Niger to the club's 19 member countries, the group said. The Paris Club, formed in 1956, is an informal group of creditor governments from major industrialized countries. It meets monthly in Paris with debtor countries to agree with them on restructuring their debts.
JetGreen Airways, a new Irish airline offering flights for 1 euro ($1.19), shut down after a week of operation, stranding hundreds of passengers in Spain. In a brief statement, JetGreen Airways apologized to customers for closing down the business without warning but said it would not repay any of the more than 40,000 people who had bought tickets, including more than 400 people expecting to fly home yesterday from Spain.
JetBlue Airways said it won't add flights at Dulles International Airport until it sees how a competitive "bloodbath" shakes out between new low-cost carrier Independence Air and former partner United Airlines. JetBlue Chief Financial Officer John Owen said he expects fares to be slashed as the two battle for passengers. "There is going to be, in our view, a hell of a war there."
Federated Department Stores said first-quarter profit more than doubled, to $96 million, as its Bloomingdale's and Macy's stores attracted upper-income shoppers. Sales in the three months ended May 1 rose 6.9 percent, to $3.52 billion, the biggest increase in more than four years.
Lufthansa swung to a profit in the first quarter, with the sale of a stake in the Amadeus travel reservation company pushing the German airline into the black. Profit was 62 million euros ($73 million), compared with a loss of 356 million euros in the same quarter a year ago.
Wheeling-Pittsburgh Steel reported a first-quarter loss of $6.6 million on sales of $274.2 million, but the company said business was improving enough for it to plan wage increases and profit sharing in the coming months. Wheeling-Pitt, which emerged from bankruptcy protection last August, lost $45.3 million in the first quarter last year, according to a filing with the Securities and Exchange Commission.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.