Business & Finance
An inquiry into Salomon Smith Barney was expanded by New York State Attorney General Eliot Spitzer, The Wall Street Journal and Financial Times reported. Spitzer's office reportedly is looking into what, if any, role Jack Grubman and Sanford Weill played in AT&T's decision to choose the investment firm as one of three main underwriters on a record $10.6 billion issue of tracking stock in 2000. Grubman, a former Salomon research analyst, reversed his position on the stock to "buy" shortly before the selection. Weill is chief executive of Salomon's parent company, Citigroup Inc., and serves on AT&T's board.
Moves to put Hershey Foods Corp. up for sale became embroiled in Pennsylvania politics. Last Friday, Attorney General Mike Fisher asked a state court to block the charitable trust that controls the candymaker from entertaining bids that analysts say could reach $12 billion. But Fisher, the Republican candidate for governor, also came under attack by local news media, which cited anonymous sources inside the trust as claiming it was his office that encouraged the sale in the first place until the idea ran into a firestorm of protest from current and former Hershey employees, community activists, and others. A Fisher spokesman said it was "curious" that the claim had not surfaced earlier and called it an attempt to discredit the attorney general before the November election.
An alliance among Delta Air Lines, Northwest, and Continental would allow the nation's third-, fourth-, and fifth-largest carriers to sell seats on one another's flights and to pool frequent-flier miles for travelers. The partnership deal, announced Friday, must be approved by federal regulators and pilots' unions. It is similar to one proposed last month by No. 2 United Airlines and US Airways.
In an about-face, Kmart Corp. announced it doesn't need additional credit after all and will not seek a bankruptcy court's OK to apply for more. The discount retailer said earlier this month it would ask permission to pad its $2 billion credit line by up to $500 million. But a senior executive acknowledged Friday that some creditors were unwilling to support an increase because "you know, you don't really need the money." Kmart's latest projections show it should have about $1.1 billion in cash and available credit to cover obligations on time if it can meet its target for emerging from bankruptcy protection: next July.