Business & Finance
Enron and a major investment bank, UBS Warburg, have a date with a federal court in New York Friday to seek approval of their plan to help rescue the bankrupt company, reports said. The deal calls for UBS Warburg to acquire, at no upfront cost, Enron's energy trading business. For two years, Enron and its creditors will be paid one-third of pretax profits on trades. After three years, UBS Warburg may opt to begin buying out Enron's stake in the business. UBS Warburg, a division of Swiss financial giant UBS AG, outbid Citigroup of the US, a major Enron creditor, for the trading business in a court-sponsored auction last week. The deal also calls for UBS Warburg to assume none of Enron's debt. (Related stories, pages 1, 5.)
The heaviest sanctions in the history of the World Trade Organization - up to $4 billion - could be imposed against the US depending on how the former chooses to implement the tax ruling it issued Monday, reports said. The decision, long sought by the European Union, found that the US policy of allowing Microsoft, Boeing, Eastman Kodak, and other exporters to exempt 30 percent of income earned overseas constitutes an illegal subsidy. Unless the policy is ended, which the Bush administration has not said it is prepared to do, the ruling opens the way for the EU to impose the sanctions beginning in April. The Financial Times reported, however, that the WTO is unlikely to agree to the full $4 billion sought by the Europeans.
Dollar General Corp., a mass discount retailer that operates in Wal-Mart's shadow, announced it would pay $162 million to settle lawsuits filed by its shareholders related to overstated profits. Company officials said an internal investigation of accounting irregularities found the overstatement, between 1998 and 2000, amounted to about $100 million. The company is based in Goodlettsville, Tenn., and operates about 5,400 stores in 27 states.
Another 4,000 jobs will be cut by deeply indebted tele-communications equipment maker Marconi PLC, the company said, citing a "still very difficult outlook." The struggling London-based company warned last summer that the move was likely. It already has laid off 30,000 employees since the start of its current fiscal year and ousted several senior executives as sales fell and debt swelled to more than $6 billion.