Business & Finance
Troubled American International Group, the insurance giant, has discovered an additional $1 billion in accounting problems - an amount that could rise as investigations into its finances progress, The New York Times reported. AIG already has admitted to $1.7 billion in improper accounting, and its practices are being probed by two federal agencies and the New York State attorney general's and insurance commissioner's offices. AIG's specialty is reinsurance, or selling insurance to insurance companies.
Bankrupt Adelphia Communications, the fifth-largest US cable-TV operator, resolved a federal fraud investigation Monday by agreeing to establish a $715 million fund to compensate investors. Prosecutors backed away from filing criminal charges against the company, which, as part of a three-way settlement, will receive assets valued at $1.5 billion from founder John Rigas and members of his family. Rigas and his son, Timothy, were convicted last year of conspiracy to manipulate earnings and appropriate corporate funds for their own use. The company agreed last week to sell its assets to Comcast Corp. and Time Warner Inc. for $17.6 billion.
US buyout specialists are in an apparent bidding war for Spanish telephone/cable-TV giant Grupo Auna, a published report said. Citing sources close to the situation, The New York Times said Kohlberg Kravis Roberts and a consortium consisting of the Blackstone Group, Apax Partners, and Britain's CVC Capital Partners have submitted competing offers valuing the company at about $15.6 billion. Grupo Auna has more than 10 million customers.
Meridian Automotive Systems Inc. became the latest maker of parts to file for protection from creditors under Chapter 11 of the federal bankruptcy code. The Dearborn, Mich., company builds bumpers, instrument panels, and other components for General Motors, Ford, and DaimlerChrysler. Tower Automotive, Intermet, and Citation Corp. also have sought Chapter 11 protection.
Molex Inc., the world's second-largest maker of plugs, switches, and other electrical connectors, said it will lay off 1,200 employees as it closes plants in Guilford, N.H.; Detroit; Shannon, Ireland; and Portugal. The company is based in Lisle, Ill.