Business & Finance
An Illinois state court upheld the $6.8 billion bond that tobacco giant Philip Morris USA must post to appeal a hefty penalty for allegedly misleading ads for its so-called "light" cigarettes. The company had sought to lower the original bond - $12 billion - to $1.5 billion; the judge in the case compromised at the $6.8 billion figure. On Friday, the court also granted plaintiffs exclusive rights to the $6 billion note that parent company Altria Group is submitting as an initial payment, in the event Philip Morris files for bankruptcy during an expected lengthy appeals process. Philip Morris was ordered in March to pay $10 billion in the "light" cigarette judgment.
Citing low bids, Enron Corp. abandoned efforts to sell many of its power and pipeline assets. Instead, the bankrupt energy trader on Friday announced plans to cluster 19 international holdings, mainly in Central and South America, into a unit tentatively called InternationalCo., and interest in three North American gas pipelines into a second venture, PipeCo. Creditors would own shares in the two companies under the reorganization plan, which must be approved by a New York bankruptcy court.
American Airlines and United announced matching fare increases late last week. The increases of $10 per round trip will take effect June 1, just as passenger security fees - levied by the federal government to aid the troubled industry - expire. Previous attempts by airlines to hike fares have quickly collapsed, however, amid intense competition.
The world's oldest insurance company, Royal & Sun, set a record for the year to date in initial public offerings, Bloomberg.com reported. Investors paid $1.2 billion for shares in the company's Australia-New Zealand subsidiary, Promina Group Ltd., which begins trading Monday. Promina combines auto, home, general, and life insurance sales with funds management. The previous IPO record for 2003 was by another insurance company, Japan's Taiyo Mutual, which raised $639 million in March. Royal & Sun is based in London.