American Express filed suit in federal court in New York Monday, alleging that anticompetitive practices by rivals Visa, MasterCard, and eight banks whose executives sat on their boards kept it from developing its business. The suit, which seeks damages that could run to the billions of dollars, came a month after the Supreme Court rejected appeals by Visa and MasterCard of a federal ruling that they'd violated antitrust law by barring partner banks from issuing credit cards in the name of a competitor. Visa announced it will contest the lawsuit because American Express "already got what it wanted from the court: the ability to issue its products through Visa members."
The accounting problems of Fannie Mae, the company that finances one of every five home mortgages in the US, deepened Monday when it missed the deadline for filing its third-quarter earnings report. It conceded that outside auditor KPMG is not yet prepared to sign off on its financial statements, pending a review by the Securities and Exchange Commission. In straightening out its auditing practices, which are under investigation by the SEC, Fannie Mae might be forced to record an estimated net loss of $9 billion for the July-September period. Fannie Mae acknowledged that some of its accounting policies do not comply with generally accepted principles, despite previous statements to the contrary.
Bidders for scandal-ridden cable-TV giant Adelphia Communication Corp. must put up at least $17.5 billion if they hope to acquire the company at auction, a creditors group has determined, according to a report in The Wall Street Journal. The newspaper identified a joint venture of Comcast Corp. and Time Warner Inc. as the "clear favorite" among prospective bidders. Adelphia founder John Rigas and his son Timothy were convicted of fraud and conspiracy in July, two years after the family was forced to give up control of the business.
Vodafone, the world's largest cellphone service provider, will double the dividend it pays to stockholders and will increase what it spends to buy back its own shares from $5.5 billion to $7.4 billion, British newspapers reported. The moves come despite the fact that the company posted a 6 percent drop in earnings for the first six months of its fiscal year.
Lionel, whose name is synonymous with model trains, filed for bankruptcy after being found guilty of using locomotive designs that were "misappropriated" from a rival. Chief executive Jerry Calabrese said Lionel will appeal the $41 million judgment because it "is just too much for ... a small business to bear." The 104-year-old company is based in Chesterfield, Mich.