UAL asked U.S. Bankruptcy Judge Eugene R. Wedoff to extend from Aug. 30 to the end of the year its deadline to file its recovery plan. The parent company of United Airlines said it needed the extra time to obtain exit financing after the U.S. Air Transportation Stabilization Board denied its application for $1.1 billion in loan guarantees in June. The issue will be heard in court on Aug. 20.
Susan Buffett Left Shares to Charity
Berkshire Hathaway said Susan Buffett, the wife of Chairman Warren Buffett who died last month, left more than 95 percent of her 31,530-share company stake, worth about $2.7 billion, to family charities, mostly the Buffett Foundation. Warren Buffett, who sits on the board of The Washington Post Co., expects to sell 1,200 to 1,500 Berkshire A shares in the next two years to pay taxes, expenses and cash bequests, the company said. Susan Buffett also owned about $500,000 in B shares.
Conseco and its successor in the variable annuities business, Inviva, agreed to pay $20 million in a settlement that ends an investigation into charges by New York Attorney General Eliot L. Spitzer and the Securities and Exchange Commission that the companies allowed some favored investors to engage in rapid trading of mutual funds linked to variable annuity products, Spitzer said. The SEC called the settlement the first enforcement action charging insurance companies with securities fraud for allowing market timing of mutual funds.
U.S. Restaurant Properties will merge with a restaurant real estate investment trust, CNL Restaurant Properties, and 18 CNL Income Funds in a deal valued at $1.3 billion in cash and stock. U.S. Restaurant said the transaction would create the leading restaurant real estate and financial services company in the country, with $2.5 billion in total assets and 1,900 properties. The transactions are subject to approval from shareholders and are conditioned on securing financing and regulatory approvals.
Delta Air Lines said it burned through $744 million in cash in the first six months of 2004 and again warned that it could be forced into bankruptcy without $1 billion in concessions from its pilots. The carrier said in a filing with the Securities and Exchange Commission that high fuel prices and lower-than-expected passenger revenue had made it dip into cash reserves, but warned that such spending was "unsustainable."
The New York Stock Exchange asked a federal judge to dismiss lawsuits filed by former NYSE chairman Dick Grasso against the exchange and its current chairman, John S. Reed, that sought $50 million in back pay and unspecified damages for defamation of character. The NYSE argued that Grasso's suits deal with state law but were filed in federal court. At Grasso's request, a lawsuit from New York Attorney General Eliot L. Spitzer demanding more than $100 million from Grasso was moved to federal court, but Spitzer and the exchange have asked for it to be moved back to state court. Legal experts say the case against Grasso will probably wind up back in state court.
T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday rose to 1.470 percent from 1.465 percent last week. Rates on six-month bills fell to 1.665 percent from 1.735 percent. The actual return to investors is 1.497 percent for three-month bills, with a $10,000 bill selling for $9,962.40, and 1.703 percent for a six-month bill selling for $9,915.80. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, fell to 2.07 percent last week from 2.16 percent the previous week.
Trump Hotels & Casino Resorts said it will seek Chapter 11 protection from its creditors so that it can reduce debt and reorganize with $400 million in investment each from Credit Suisse First Boston and founder Donald Trump. The agreement would cut the company's average interest rate by more than 4 percent and allow growth in new markets, Vice President Scott Butera said.
Inventories at U.S. wholesalers rose 1.1 percent in June, greater than forecast, as sales failed to increase for the first time in more than a year, a government report showed. The June increase, which brought the value of goods at distributors, warehouses and terminals to $309.5 billion, followed a gain of 1.4 percent the month before, the Commerce Department said.
FedEx agreed to buy Parcel Direct, which sorts goods ordered from catalogs and over the Internet, for $120 million in cash to cut the cost of delivering packages to homes. FedEx said it expects to complete the purchase of the Quad/Graphics unit before November.
Citigroup agreed to buy Knight Trading Group's derivatives unit for $225 million. Knight is the main market maker at the Chicago Board Options Exchange for options on 180 companies. Citigroup is trying to increase electronic trading revenue.
Nicor said four employees were fired recently because they were suspected of committing fraud, though it did not name them. The natural gas utility has been the subject of investigations by the Securities and Exchange Commission, the U.S. attorney's office and the Illinois Commerce Commission.
Cephalon was cleared by U.S. antitrust enforcers to complete its $515 million purchase of Cima Labs. Cephalon agreed to license a version of Actiq to Barr Pharmaceuticals, the Federal Trade Commission said, helping ensure the combination of Cephalon and Cima won't reduce competition for painkillers used by cancer patients.
StarTek will hire 500 people and invest $5 million to open a technical support and customer service center in Henry County, Gov. Mark R. Warner (D) said. StarTek's clients are mainly telecommunications and computer software firms.
Sumitomo Mitsui Financial Group of Japan announced a formal bid for a "merger of equals" with rival bank UFJ Holdings, intensifying a takeover battle to create the world's biggest bank. Sumitomo Mitsui said it would give troubled UFJ at least $4.54 billion in financial aid, countering a bid for UFJ by rival Mitsubishi Tokyo Financial Group.
Parmalat said it had filed suit against Deutsche Bank for 17 million euros, nearly $21 million, plus interest. The Italian company seeks to recover the debt its previous management repaid Deutsche Bank shortly before it was forced to declare insolvency.
Charter Communications said its second-quarter loss widened to $415 million from $37 million in the same quarter a year earlier as the company lost cable TV customers and marketing and programming costs rose.
Cablevision Systems posted a second-quarter net loss of $187.1 million, compared with a profit of $158.3 million in the same period a year ago, hurt by its satellite TV business.
Wheeling-Pittsburgh Steel posted a profit of $27.1 million, its first in several years, on strong sales and record-high steel prices. It lost $21.5 million in the same quarter a year earlier.
Liberty Media narrowed its loss to $314 million from $464 million in 2003's second quarter with the help of a bigger interest in QVC.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.