Business & Finance
Citigroup and J.P. Morgan Chase agreed to pay a combined $308 million Monday to settle charges related to Enron's massive collapse two years ago. The Securities and Exchange Commission (SEC) and New York prosecutors accused the two largest US banks of helping Enron to set up the complex web of financial transactions used to inflate revenues and hide debt, defrauding investors. The penalties are payable to the SEC, which said it will use the money to pay back those victimized by the Enron fraud.
US Airways posted a $13 million profit for its first quarter since emerging from bankruptcy March 31. But that was due mainly to the $214 million in federal aid the carrier received as part of a package to help the beleaguered industry during the war in Iraq. Excluding the aid and other one-time items, US Airways reported a pretax loss of $154 million, an improvement over its $248 million in losses for the same period last year.
Elsewhere in the industry, Atlantic Coast Airlines said it's ending a partnership with bankrupt United and plans to operate as an independent, low-fare carrier. Atlantic is the second-largest airline serving Dulles International Airport near Washington; United is No 1.
A high-profile investment group led by Cerberus Capital decided not to join the bidding for Clayton Homes Inc., Dow Jones Business News reported. Clayton, a leading builder of mobile homes and operator of mobile-home parks, postponed a shareholder vote until next month on a $1.7 billion offer by Berkshire Hathaway, investor Warren Buffett's holding company, to entertain other offers. Clayton is based in Maryville, Tenn. The Cerberus consortium reportedly also included Credit Suisse First Boston, the Blackstone Group, and Texas Pacific Group.