Delphi Alters Executive Pay
Auto supplier Delphi said it has beefed up severance packages for top executives in order to encourage them to stay on as the company prepares for a major restructuring that could include seeking Chapter 11 bankruptcy protection.
In a filing with the Securities and Exchange Commission, Delphi said 21 top executives will be eligible for 18 months of severance pay and at least a portion of their bonus if Delphi terminates their employment or they leave for "good reason." Previously, severance packages were capped at 12 months.
Delphi has threatened to declare bankruptcy before Oct. 17 if it fails to reach a restructuring agreement with General Motors, its former parent, and the United Auto Workers.
Rigases Charged With Tax Evasion
The founder of Adelphia Communications and a son, both already convicted of fraud at the bankrupt cable television company, have been indicted on charges that they and other family members didn't pay $300 million in taxes. Former chief executive John J. Rigas failed to report income of $143 million and son Timothy J. Rigas, the company's former chief financial officer, failed to report income of $239 million, according to a federal grand jury indictment unsealed in Pennsylvania.
Judge Delays KPMG Settlement
A federal judge declined to grant preliminary approval to a $225 million settlement by KPMG, the fourth-largest U.S. accounting firm, and its outside legal advisers, to resolve claims that KPMG committed fraud by selling illegal tax shelters.
U.S. District Judge Dennis M. Cavanaugh said he wanted a full hearing to investigate claims by Mark Kottler, who accused his former lawyers of representing him in a KPMG lawsuit in state court in Florida while secretly negotiating the settlement for more than a year. The hearing will be held Oct. 28.
Conrad Black Loses Sale Proceeds
Federal agents seized nearly $9 million in proceeds from the sale of Conrad M. Black's apartment on Park Avenue in New York.
A civil warrant said Black derived the money as part of a fraud scheme. He has been charged with no criminal wrongdoing.
Black quit as chairman of the newspaper publishing company Hollinger International in 2003 after an internal investigation accused him and other insiders of looting the company of hundreds of millions of dollars.
Snyder Makes Six Flags Pitch
Redskins owner Daniel M. Snyder and Mark Shapiro, chief executive of Snyder's Red Zone, met with Six Flags investors in New York to discuss Snyder's plan to turn around the amusement park giant, according to sources who spoke on condition of anonymity because of the sensitivity of the talks.
Snyder, Six Flags' largest shareholder, has proposed replacing the company's top two executives and one director with himself, former ESPN programming executive Shapiro and home builder Dwight V. Schar. Red Zone spokesman Karl Swanson did not return phone calls yesterday seeking comment. Snyder has said he would pay up to $6.50 a share to increase his stake in Six Flags, according to filings with the Securities and Exchange Commission.
Pricing Feud Disrupts Web Traffic
Level 3 Communications and Cogent Communications Group, suppliers of Internet service to phone and cable companies, are feuding over prices and network-sharing terms, causing disruptions at Web sites.
The companies own fiber-optic networks that link phone and cable companies and independent Internet service providers. The two stopped handling each other's traffic two days ago, both companies said.
The disruption may block Internet users from millions of Internet sites, Cogent chief executive David Schaeffer said in an interview with Bloomberg News.
Chrysler Cites Transmissions
Chrysler Group recalled about 300,000 vehicles with a potential defect that could prevent drivers from placing the transmission in "park."
The recall involves some 2005 models of Jeep Liberty, Jeep Wrangler, Chrysler 300, as well as Dodge Magnum, Dodge Dakota and Mitsubishi Raider pickups and Dodge Durango vehicles equipped with some six-cylinder engines and automatic transmissions.
Chrysler also said it was recalling about 283,000 Dodge Ram pickups from the 2003-2005 model years equipped with diesel engines and automatic transmissions to correct possible inadvertent movement of the vehicles.
Radiation May Harm Defibrillators
Cosmic radiation may damage older models of St. Jude Medical defibrillators implanted in about 26,000 people, the company said.
St. Jude reconfigured its implantable defibrillators in 2002, using a different memory chip that doesn't have a problem with cosmic rays.
While the Earth's atmosphere absorbs most background radiation from the cosmos, some high-energy particles do make it to Earth. St. Jude was able to mimic the effect in a laboratory, prompting the advisory to doctors and regulators.
Flyi's Finance Chief Resigns
Flyi, parent of financially troubled Independence Air, said its chief financial officer, Richard J. Surratt, resigned to "pursue other opportunities." Surratt joined the Dulles-based company in 1999 when it was known as Atlantic Coast Airlines, a feeder carrier for United Airlines. Surratt's replacement is David Asai, the company's vice president and controller since 1998.
MERGERS & ACQUISITIONS
BP Sells Chemical Unit
BP agreed to sell its Innovene unit to Ineos Group Holdings for $9 billion cash. London-based BP said last year that it would sell Chicago-based Innovene, which makes solvents for paint removers and resins used in bottles, or conduct a public offering of the business. Ineos, which was formed in a 1998 management buyout of another BP petrochemical division in Belgium, said the acquisition would make it the world's fourth-largest petrochemical company. The companies expect to close the deal, which includes two oil refineries in Europe, early in 2006.
WTO Rules Out Soft-Drink Tax
Mexico violated global trade rules in a soft-drink dispute with the United States, a World Trade Organization panel ruled. At issue is a 20 percent tax Mexico imposed on beverages made with imported sweeteners such as high-fructose corn syrup and sugar made from beets. Drinks made with Mexican cane sugar are exempt from the tax.
The dispute over sugar and corn sweetener has cost U.S. corn refiners $944 million annually, according to the Washington-based Corn Refiners Association.
Compiled from staff and news service reports.