Business & Finance
The FBI was refusing to comment on its role in probing the activities of Global Crossing Ltd., the fiber-optics network company whose Jan. 28 bankruptcy filing is the largest in that field in US history. Global Crossing already is the subject of an investigation by the Securities and Exchange Commission (SEC) that has begun to vie for attention with the Enron scandal. The SEC probe reportedly is focusing on allegations by a former vice president of the company that Global Crossing misstated revenues and expenses and that it failed to warn investors that sales were slowing at a time when its founder-chairman had just sold off more than $120 million worth of stock. The allegations were made in a letter last August that, according to the Financial Times, the company admits withholding from its auditors. Global Crossing claims the allegations are without merit, noting that the ex-vice president is demanding a multimillion-dollar severance settlement.
Enron's natural gas- and power-trading business is to surge back to life today, renamed UBS Warburg Energy. Swiss investment bank UBS Warburg acquired the business, credited with most of Enron's $101 billion in revenue in 2000 but now about $20 billion in debt, at auction last month. As part of the deal, UBS is to pay Enron a percentage of pretax profits in the form of royalties.
Bankrupt Pacific Gas & Electric was denied a federal court's OK to reorganize under a plan that would put some of its most valuable assets beyond the reach of state regulators in California. In San Francisco late last week, bankruptcy Judge Dennis Montali rejected PG&E's proposal to pay $13 billion owed to creditors by splitting itself into three companies whose hydroelectric dams, power plants, transmission lines, and thousands of acres of land would come under only federal jurisdiction. PG&E officials said they would resubmit the plan after it was modified in accordance with the judge's wishes.
Goodyear, the world's third-largest maker of tires, will cut 3,500 more jobs this year as part of a plan to restore profitability, a spokesman said. That follows 10,000 layoffs in 2001. Goodyear, which also produces industrial chemicals, employs 96,000 workers in 28 countries.