Business & Finance
On the brink of one of the biggest corporate implosions in history, the global energy trader Enron was poised to file for bankruptcy after rival Dynegy Inc. abandoned an $8.4 billion acquisition plan. In quick succession Wednesday, two rating agencies, Standard & Poor's and Moody's Investors Service, dropped Enron's credit rating to junk status, forcing it to pay $3.9 billion in debts that analysts said it likely can't afford. Meanwhile, investors were unloading 339 million Enron shares on the New York Stock Exchange - a one-day record for selloffs - which sent the company's stock plunging 85 percent in value. As recently as last summer, Enron ranked No. 7 on the Fortune 500 list of the largest US businesses. Last year, it was valued at $80 billion and had paid $100 million for the naming rights to Houston's Major League Baseball park. By Wednesday night, its worth had dropped to about $500 million and its operations in Australia were suspended. Much of Enron's difficulty stemmed from its revelation last month that for four years it had overstated profits and kept $500 million in debt off its books. (Story, page 1.)
McCrory Corp., the 119-year-old operator of chain discount variety stores, announced an immediate going-out-of-business sale that will continue until its 193 remaining outlets close in February. At its peak, the company had 1,300 stores nationwide under its own name, plus those of G.C. Murphy, J.J. Newberry, Dollar Zone, and T.G.&Y. But it shed more than 600 stores while under Chapter 11 bankruptcy protection in the 1990s. McCrory is based in York, Pa.
IBM said it will cut 1,180 jobs from its microchip and storage technology divisions despite taking such measures over the summer as reducing overtime and ending the use of contract workers. The layoffs will affect IBM's facilities in Vermont, New York, Minnesota, North Carolina, California, and Colorado.