Business & Finance
Rite Aid Corp., the nation's third-largest drugstore chain, escaped federal charges of criminal wrongdoing in what the Securities and Exchange Commission called the largest restatement of corporate earnings in US history. But one current and three former senior executives of the company were indicted Friday on 37 counts of conspiracy, fraud, making false statements, and other offenses. A fifth former executive already has pleaded guilty to some of the charges and is cooperating with investigators. Because of their actions, the East Pennsboro Township, Pa.-based company was forced to revise its pretax and net incomes between May 1997 and May 1999 by $2.3 billion and $1.6 billion, respectively. Last year, Rite Aid paid $200 million to settle lawsuits brought by shareholders over the matter, but admitted to no wrongdoing and has paid no fine.
Adelphia Communications Corp. is expected to file for bankruptcy protection today, sources familiar with its troubled finances said. The US's sixth-largest cable-TV operator reportedly reached a deal with two lenders, J.P. Morgan Chase and Salomon Smith Barney, for a $1.5 billion line of credit to continue in business while it reorganizes. Adelphia's problems have been mounting since the disclosure in March of an estimated $3.1 billion in off-the-books borrowing by its founding family for personal investments. Meanwhile, cable customers in at least two states have hired a Washington law firm to protect their interests during Adelphia's reorganization.
Employees of bankrupt KPNQwest, the largest Internet data carrier in Europe, were ordered Friday to stop maintaining the network to avoid incurring "any further costs." But it was unclear when the order was to take effect, and administrators were optimistic that cash still could be found to keep the network afloat. As of Saturday, negotiations with its remaining parent, Dutch telecommunications giant KPN, were ongoing, and the company was prepared to use backup diesel engines to generate its own power for the short term, if necessary, one worker said.