United Airlines' parent company announced that it and two major financial-services institutions have reached a deal for $2 billion in loans to help it emerge from bankruptcy protection. The lenders, J.P. Morgan Chase and Citigroup, each will underwrite $800 million worth of the guaranteed portion of the financing and $200 million of the nonguaranteed portion. A year ago this month, when UAL Corp. filed for bankruptcy, the federal Air Transportation Stabilization Board rejected its request for a guaranteed emergency loan, calling its business plan inadequate.
Nine more employees were fired by Putnam Investments for what the company alleged were improper trading practices. An unspecified number of others were "strongly admonished" - although not let go - because an internal investigation into the growing market-timing scandal showed they were unaware of company policy or still were engaging in the practice after being warned to stop. Market-timing involves quick in-and-out trades that drain profits from long-term investors. It isn't illegal, but most mutual-fund companies officially discourage it. Putnam already had fired six portfolio managers in connection with its role in the scandal, which has cost it a reported $32 billion in assets withdrawn by, among others, state- and municipal-employee pension plans.
Solutia Inc., a leading maker of specialty chemicals, filed for federal bankruptcy protection, but said it planned to continue operating uninterrupted. The company, based in St. Louis, complained of being unjustly burdened by high environmental cleanup costs when it was spun off six years ago by Monsanto. Solutia's products are used for such purposes as making film, stain-resistant carpets and upholstery, dental floss, safety glass, hydraulic fluids, and for water-treatment.
Aventis, the life-sciences giant, said it will pay $1.8 billion into its pension plan in Germany to try to head off a review of its credit rating. The underfunded program ended last year with $4.3 billion in liabilities, and last January the rating agency Standard & Poor's revised its outlook on Aventis from "positive" to "stable." The company was formed from the 1999 merger of pharmaceutical industry leaders Hoechst of Germany and Rhône-Poulenc of France. It said its pension obligations in France will continue to be paid out of cash flow for legal reasons.