Embattled Marsh & McLennan Companies boss Jeffrey Greenberg resigned in response to a lawsuit brought last week against the insurance giant by New York Attorney General Eliot Spitzer (D). The company is accused of bid-rigging and price-fixing in the sale of property and casualty policies to other businesses. Because of leadership changes and planned "significant reforms" in the way the brokerage does business, Spitzer said prosecution will be unnecessary. Michael Cherkasky, previously the chief of Marsh & McLennan's risk-consulting subsidiary and once Spitzer's boss in the New York district attorney's office, was named the company's new leader.
Delta Air Lines received a $600 million financing commitment from a unit of American Express Co. relative to the carrier's SkyMiles frequent-flier program. The deal calls for $100 million in loans, with the remainder to be in the form of a prepayment for SkyMiles. The airline also won agreement with creditors to defer $135 million in debt due in 2005 for two years. Still, unless reluctant pilots accept $1 billion in concessions, Delta could file for bankruptcy as soon as Wednesday, The New York Times reported.
ATA Holdings, parent of the 10th-largest US airline, appointed a chief restructuring officer, heightening speculation that the subsidiary's deteriorating financial condition may force a bankruptcy filing. This follows last week's filing with the Securities and Exchange Commission, in which ATA said its situation has worsened since Aug. 16, when the company warned it probably would run out of cash in early 2005 and might sell some assets or restructure.
Citigroup's chief executive traveled to Tokyo and bowed in apology for three years of wrongdoing by the company that caused Japanese regulators to pull the license of its private banking unit last month. Charles Prince also announced the closure of Cititrust & Banking, another subsidiary that caters to wealthy clients, because of what an unidentified company official called worry that violations might be found there as well. The company's problems in Japan have cost 15 executives their jobs, The New York Times reported.
One of the world's leading forest products companies, Svenska Cellulosa AB, said it will cut 1,200 jobs, most of them at its plants in France and the Netherlands. Svenska Cellulosa, based in Stockholm, makes tissue paper, diapers and other personal hygiene products, and corrugated packaging containers.