Business & Finance
Deeply troubled Parmalat filed for bankruptcy on Christmas Eve, as the Italian government decreed "fast track" procedures to protect the multinational dairy-products group from creditors. At the same time, prosecutors ordered a search of founder Stefano Tanzi's home as they coordinated two separate investigations into the accounting scandal that has resulted in an estimated $8.7 billion hole in the company's balance sheet. Parmalat shares were trading at just 20 percent of face value Wednesday. In addition to the dairy and juice products it markets in 29 countries, Parmalat owns three US cookie bakeries. In all, it employs 36,000 people.
The Nasdaq stock market denied a report in The Wall Street Journal Tuesday that its chief, Robert Greifeld, approached the New York Stock Exchange (NYSE) about a possible merger. Nasdaq said the story has "no basis in fact." The NYSE declined to comment. Analysts largely supported the idea, however. A merger would require the OK of securities regulators and the Justice Department.
Capping its second straight tumultuous year, Vivendi Universal will pay $50 million to settle charges of wrongdoing. The penalty, announced late Tuesday by the Securities and Exchange Commission, also applies to ex-chairman Jean-Marie Messier, who will pay a $1 million penalty of his own, will forfeit his $25 million severance, and must agree not to serve in any leadership role in a publicly traded US company for 10 years. In addition, the French media giant's former finance chief will pay a smaller sum and be barred from corporate leadership in the US for five years. The SEC alleges that Vivendi and the two men engaged in deceptive accounting, hid certain financial commitments and investments, and issued misleading news releases to the public between December 2000 and July 2002. At the time, Vivendi's American properties included theme parks, record labels, publishing companies, cable-TV networks, and Universal Studios.
Delta Air Lines canceled executive bonuses for 2003 and announced in a memo to employees that it is reviewing all compensation for senior officials. Many employees reacted angrily earlier this year to news that the carrier was committed to millions of dollars worth of perks for executives while seeking hefty pay and layoff concessions from unions.