Roy E. Disney and Stanley P. Gold have called on Walt Disney Co.'s board to reject chief executive Michael D. Eisner's offer to retire in 2006 as well as Eisner's choice of President Robert A. Iger as his successor. The two former board members said they would propose an alternate slate of directors if Disney's board does not launch an immediate search for a new chief executive and announce that Eisner will step down from the board at the end of the search. The two former board members said a new chief executive should be in place before Disney's next shareholder meeting in early 2005. Eisner did not say whether he would seek to remain on Disney's board.
Foreign Assets Chief Leaving Treasury
R. Richard Newcomb, director of the U.S. Treasury's Office of Foreign Assets Control since 1987, will leave the enforcement agency Oct. 1, the department said. Newcomb spent 17 years at the federal agency, which plays a key role in going after terrorists' financiers and enforcing economic embargoes against Cuba and other countries. Treasury Secretary John W. Snow praised Newcomb's leadership in a statement. Newcomb, 58, plans to join the Washington law firm Baker, Donelson, Bearman, Caldwell & Berkowitz. An interim director to replace Newcomb will be announced Oct. 1, a Treasury spokeswoman said.
NASD issued an investor alert on so-called 529 plans. The alert focuses on state-sponsored college-savings plans. It comes on the heels of a sweep by the NASD, the securities industry's main self-regulatory body, to determine whether brokers are inappropriately selling these college savings plans to investors. The sweep includes 20 brokerage companies, at which 90 percent of sales are made up of out-of-state plans, according to NASD's vice chairman.
Krispy Kreme Doughnuts said an independent auditor refused to sign off on the firm's second-quarter financial statement until an outside law firm hired by the company's board performs additional work. The Winston-Salem, N.C., company said in a filing with the Securities and Exchange Commission that the unnamed auditor would not complete its review without the additional information. The filing did not discuss the auditor's request, saying only that it concerned "a specific matter relating to an acquisition in fiscal 2004."
Three companies agreed to pay $50 million to settle Securities and Exchange Commission charges that they defrauded investors in Pimco Funds. The market-timing settlement with PA Fund Management, PEA Capital and PA Distributors consists of a $40 million penalty and $10 million disgorgement.
Federated Department Stores will change the names of 184 regional department stores to Macy's. By the end of January, the Cincinnati-based retailer will operate stores exclusively under the Macy's and Bloomingdale's names.
T-bill rates were mixed. The Treasury sold $18 billion in three-month bills at a 1.64 percent discount rate, up from 1.635 percent last week, and $16 billion in six-month bills at a 1.84 percent rate, down from 1.86 percent. The three-month rate was the highest since 1.665 percent on Oct. 21, 2002. The actual return to investors is 1.671 percent for three-month bills, with a $10,000 bill selling for $9,958.50, and 1.883 percent for six-month bills, with a $10,000 note selling for $9,907.00.
Sales of recorded music fell for a fourth consecutive year in 2003, according to the International Federation of the Phonographic Industry. The industry group said sales fell by 7.6 percent in value and by 6.6 percent in units compared with 2002. The federation attributed the decline to CD burning and illegal downloading; competition for consumer spending from DVDs and cell phones; and economic uncertainty, particularly in Latin America and Asia.
A federal judge in Bismarck, N.D., dismissed another privacy lawsuit against Northwest Airlines for supplying the National Aeronautics and Space Administration with passenger data for an aviation security research project. U.S. District Judge Daniel Hovland rejected a class action in which plaintiffs said the airline had violated the Electronic Communications Privacy Act. District Judge Paul Magnuson dismissed a similar class action in Minnesota on the same grounds in June.
Michael Ovitz, the former president of Walt Disney, must face claims that his $140 million severance was a waste of company assets, a judge ruled. A Delaware Chancery Court judge found that Disney shareholders could proceed with allegations that Ovitz didn't deserve the payments and stock options he received when he left after 15 months and violated legal duties by accepting them. A trial is set for Oct. 18 in Delaware state court.
Bayer and Schering-Plough announced an alliance under which Schering-Plough will distribute the German drugmaker's primary care pharmaceutical products in the United States. The alliance will affect about 1,800 U.S.-based Bayer primary care sales and marketing positions, "either through transfer to Schering-Plough or through reductions," Bayer said.
PayPal, the online payment service, said it will start fining customers up to $500 for collecting money for gambling, pornography or the illegal sale of prescription drugs.
WPP Group, the London advertising giant, outlined details of its plan to take over the U.S. firm Grey Global. WPP said the deal will be valued at $1.52 billion. Grey will operate as an independent network within the WPP group of companies. The deal is subject to approval by regulators and Grey shareholders. Grey's clients include Procter & Gamble, 3M and Warner Bros.
Cardinal Health is restating at least three years of financial results and delaying its report for the fourth quarter. Profit will fall by 25 percent for the first quarter, the second-largest U.S. drug distributor said. The SEC launched an inquiry last October into how Cardinal accounts for revenue and in June added a probe of bulk delivery accounting.
Global Crossing, a fiber-optic network operator, said it will restate its 2003 results to show a wider loss for the year because of costs for using other carriers' networks and expenses related to settlements with access providers. Global Crossing said the restatement will widen its 2003 losses to $11 million from $9 million for Dec. 10 to Dec. 31, and to $295 million from $230 million for Jan. 1 to Dec. 9, excluding gains from its December emergence from bankruptcy reorganization. Global Crossing also said it had asked Nasdaq for a further extension until Sept. 24 to comply with the exchange's requirement that companies have audited financial statements. The shares will continue to trade while the extension request is considered.
Campbell Soup reported a 20 percent drop in fourth-quarter profit as it began its latest restructuring effort. Net income for the quarter ended Aug. 1 was $59 million, compared with $74 million during the same period a year ago. For fiscal 2004, the food conglomerate's profit was $647 million, up nearly 9 percent, from $595 million in fiscal 2003. Sales were $7.11 billion, up 6.5 percent from $6.68 billion.
Broadcom, a semiconductor maker, lowered its third-quarter revenue guidance, saying customers who make cable and satellite set-top boxes ordered too many chips during the first half of the year. The Irvine, Calif., company expects revenue for the quarter ending Sept. 30 to be flat to slightly up from its second-quarter revenue, $641 million.
Compiled from reports by the Associated Press, Bloomberg News, Dow Jones News Service and Washington Post staff writers.