Business & Finance
For the first time, deeply troubled food retailer Royal Ahold NV admitted to fraud in the accounting scandal that became public earlier this year and said it has begun a sale of new stock at a 42 percent discount to help lower its massive debt. In a series of revelations that began in February, the world's third-largest operator of supermarkets acknowledged that revenues for 2001-2002 were overstated by more than $1.1 billion. "Several dozen" employees were fired because of the incident and the company will try to reclaim money from them, it said. In other fallout, several senior managers resigned; it undertook to sell off some key assets, notably in South America; and it posted a $144 million third-quarter loss - compared to a $188 million profit for the same period a year ago. The Zaandam, Netherlands, company reportedly owes its creditors just under $13 billion.
In a major victory for Ford Motor Co., a California court slashed an American-record $290 million punitive damage award in a fatal-accident case to $23.7 million. The US Supreme Court ordered the Fifth District Court of Appeal in Fresno to reduce the award after a separate ruling last April that limits punitive damages to about four times compensatory damages. The case involves the rollover of a 1978 Ford Bronco near Ceres, Calif., that killed three members of a family even though they were wearing seat belts. Two others were hurt.
Bankrupt Aurora Foods Inc., the maker of Duncan Hines baking mixes and other popular grocery brands, won the OK of its major creditors for a merger with Pinnacle Foods Corp. Pinnacle, of Cherry Hill, N.J., markets Vlasic pickles, Swanson and Hungry Man frozen dinners, and Open Pit barbecue sauce. Aurora Foods is based in St. Louis.
Vanguarde Media, a publisher of magazines for urban and African-American readers, filed for bankruptcy in New York Wednesday. Founder/chief executive Keith Clinkscales said January issues would be the last due to a failure to attract new financing. The company's titles include Honey, Heart & Soul, and Savoy. Autodesk, a leading maker of CAD (computer-aided design) software, said it will cut 650 jobs and close an undetermined number of offices next year. Autodesk is based in San Rafael, Calif.