Other items: Collaboration earns $1 million payment; Merger discussions reportedly ended; 3 plead guilty in insurance probe ...
Atlanta-based Cingular Wireless said yesterday that it will lay off up to an additional 182 employees in Washington state as part of its merger with AT&T Wireless.
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So far, the company has eliminated 425 positions from AT&T Wireless’ former offices in Washington, including its Redmond headquarters.
Those affected in this week’s cuts include employees from all ranks, a company spokeswoman said. Cingular has said it expects to reduce its combined work force of about 68,000 by about 10 percent, or 7,000 employees. AT&T Wireless had about 31,000 employees in the U.S. and about 5,700 in Washington.
Collaboration earns $1 million payment
Seattle Genetics said yesterday it will receive a $1 million payment under a drug-development collaboration with New Haven, Conn.-based CuraGen.
The company said CuraGen exercised an option to develop drugs against a second target, in addition to one it has worked on since the collaboration started in June. The companies are developing antibodies that seek out tumor cells, combined with drugs that give them extra cell-killing punch.
Nation / World
May / Federated
Merger discussions reportedly ended
Merger talks between May Department Stores and rival Federated Department Stores reportedly have ended after the two retailers could not agree on how much Federated would pay for May.
Negotiations broke down last week between Cincinnati-based Federated — owner of Macy’s and Bloomingdale’s chains — and St. Louis-based May, operator of Lord & Taylor, Famous-Barr, The Jones Store, Filene’s and other regional department stores, The Wall Street Journal reported yesterday, citing unidentified people familiar with the matter.
May and Federated declined to comment yesterday.
May yesterday rose 24 cents to close at $32.10. Federated shares gained 75 cents to close at $58.
Marsh & McLennan / AIG
3 plead guilty in insurance probe
A former senior executive at Marsh & McLennan and two AIG employees pleaded guilty yesterday to criminal charges in the state’s probe of bid-rigging and price-fixing in the insurance industry.
Joshua Bewlay, 39, of Tuxedo Park, N.Y., a former managing director at Marsh; John Mohs, 36, of Manhattan, a vice president in a unit of AIG, and Carlos Coello, 33, of Teaneck, N.J., an AIG underwriter, entered their pleas yesterday in Manhattan’s state Supreme Court.
All three defendants admitted to participating in a scheme that allowed Marsh, the nation’s largest insurance broker, to protect incumbent insurance carriers when their business was up for renewal.
Compiled from Seattle Times business staff and The Associated Press
Defense attempts to discredit witness
Richard Scrushy’s lawyers yesterday depicted a main witness against the fired HealthSouth chief as a free-spending, tax-dodging liar who made millions while orchestrating a huge fraud at the rehabilitation giant.
But the tough cross-examination didn’t sway former HealthSouth finance chief Bill Owens from the central theme of his 10 days on the stand: that Scrushy was behind what prosecutors describe as a scheme to overstate earnings by some $2.7 billion.
Testimony showed Owens — one of 15 former HealthSouth executives who pleaded guilty and could testify against Scrushy — paid cash for more than $3 million worth of property and has a $700,000 tax lien from 1996 on his $1.3 million home.
Ex-official says loans didn’t alter policies
Tyco International’s ex-head of human resources testified yesterday that the company’s compensation committee took no action when it learned in early 2002 that its top executives had millions of dollars of outstanding loans from the company.
Facing cross-examination by defense attorneys in her fourth day on the stand, Patricia Prue, senior vice president of human resources at the conglomerate from 1998 to 2002, said the directors made no changes to the company’s so-called Key Employee Loan Program (KELP) or its relocation loan program in February 2002, other than to ask for a regular update of loan balances over $50,000.
The committee learned at a February 2002 meeting that L. Dennis Kozlowski, Tyco’s former chief executive, had more than $18 million in outstanding loans and Mark H. Swartz, its ex-chief financial officer, had more than $7 million in outstanding KELP loans, Prue said.
Kozlowski, 58, and Swartz, 44, are facing charges of grand larceny, securities fraud and other crimes in New York State Supreme Court over giant bonuses and other compensation they received while working as Tyco’s top executives. They each face up to 25 years in prison on the most serious charge of grand larceny. They have denied wrongdoing.
Japan in recession, its 4th since 1991
Japan’s gross domestic product unexpectedly shrank in the fourth quarter, and revised figures also showed a contraction in the previous period, throwing the economy into its fourth recession since 1991.
The economy contracted at an annual 0.5 percent pace, the Cabinet Office said in a report in Tokyo yesterday.
For all of 2004, the economy grew 2.6 percent in real terms from the previous year. Japan’s growth last year compares with the 4.4 percent expansion in the United States and a 2 percent increase in the economy of the dozen countries sharing the euro.
Fannie Mae / Freddie Mac
Calif. investors sue, claim high loan fees
Fannie Mae and Freddie Mac, the two-largest buyers of U.S. home loans, have been sued by California investors claiming the companies charged artificially high fees on real-estate loans.
The two government-chartered companies colluded to “fix, raise, maintain or stabilize” the so-called guarantee fees, or G-Fees, lenders pay on residential real-estate loans in California, according to the lawsuit filed yesterday in state court in Los Angeles.
In 2003, artificially high guarantee rates allowed the two companies to charge G-Fees totaling $4 billion, the lawsuit said.
Union contracts approved by court
U.S. Bankruptcy Court approved new contracts between Aloha Airlines and three of is largest employee unions, the carrier announced Monday.
The agreements already had been ratified by the Air Line Pilots Association, the Association of Flight Attendants and District Lodge 141 of the International Association of Machinists and Aerospace Workers.
The airline filed for Chapter 11 bankruptcy protection in December.
Each of Aloha’s employee groups will accept a 10 percent wage concession for this year and next year as part of a plan to cut labor expenses by $40 million a year, the airline said.
Meanwhile, Aloha said it has negotiated tentative agreements with its remaining two employee unions, IAM District Lodge 142, representing mechanics and inspectors, and the Transport Workers Union, representing dispatchers.
Compiled from The Associated Press, Bloomberg and Dow Jones