In other items: Federal judge rejects AOL spam-case guilty plea; H&R Block subsidiary is fined for improper trading; and Oracle integration plan will be final Jan. 14.
A federal judge yesterday approved Southwest Airlines’ $117 million deal with ATA Airlines, a package that gives ATA the infusion of capital it needs to reinvent itself as it emerges from bankruptcy protection.
The deal approved by Bankruptcy Court Judge Basil Lorch III boosts Southwest’s dominance at Chicago’s Midway International Airport, where it is the largest carrier.
By adding six of ATA’s 14 Midway gates to its current 19, Dallas-based Southwest will increase its Midway capacity by nearly a third.
ATA announced last week that it had accepted Southwest’s bid over a rival $89 million offer by Orlando, Fla.-based AirTran Airways for all 14 ATA Midway gates.
Southwest agreed to pay about $87 million for six of ATA’s Midway gate leases and acquire ATA’s aircraft maintenance center at the Chicago airport. The price would include $40 million and $47 million in financing.
Federal judge rejects spam-case guilty plea
A federal judge refused to accept a guilty plea yesterday from a former America Online software engineer accused of stealing 92 million e-mail addresses and selling them to spammers.
Judge Alvin Hellerstein of Manhattan federal court said he was not convinced Jason Smathers, 24, had actually committed a crime under new federal “can-spam” legislation that took effect earlier this year.
Smathers, of Harpers Ferry, W.Va., planned to enter guilty pleas to charges of conspiracy and interstate transportation of stolen property. But the judge turned him away and scheduled another hearing for January.
Subsidiary is fined for improper trading
A subsidiary of H&R Block said yesterday it has agreed to pay $500,000 in fines to settle charges that two former brokers helped a hedge fund engage in improper trading practices.
The National Association of Securities Dealers, the brokerage industry’s self-policing organization, also required the investment division of the world’s largest tax preparer to pay $325,000 in restitution to mutual funds affected by the improper trades.
The subsidiary, H&R Block Financial Advisors, said it agreed to settle the case without admitting wrongdoing.
Integration plan will be final Jan. 14
Oracle Chief Executive Larry Ellison said he will have a complete plan for combining the software maker’s operations with PeopleSoft by Jan. 14.
Oracle this month agreed to buy PeopleSoft for $10.3 billion after an 18-month fight. The “overall plan” is to maintain separate groups for handling development and support of each company’s software, Ellison told PeopleSoft employees in a letter last week.
Ellison, 60, wants PeopleSoft’s 12,750 customers and more than $1 billion in maintenance sales to buttress Oracle’s applications business and reduce his reliance on database software, which makes up about 80 percent of revenue.
The $26.50-a-share deal is due to be completed next week, Ellison wrote.
Employees of PeopleSoft and Oracle will be told by Jan. 14 whether they have a job in the new company.
Ellison said he plans to expand Oracle’s sales, development, support, consulting and training staff with some of PeopleSoft’s more than 11,000 employees.
Compiled from The Associated Press and Bloomberg News