In The Region
Md. coal producer sets its IPO price at $22 per share
Foundation Coal Holdings Inc. said yesterday that it has priced its initial public offering of 23.6 million shares of common stock at $22 a share. The common stock will begin trading today on the New York Stock Exchange under the symbol "FCL."
Morgan Stanley & Co. and Citigroup Global Markets Inc. are managing the IPO, and UBS Securities, Bear Stearns & Co., Credit Suisse First Boston, Lehman Brothers Inc., ABN AMRO Rothschild LLC and Natexis Bleichroeder Inc. are co-managers .
Linthicum Heights-based Foundation Coal, the fourth-largest coal producer in the nation, has granted the underwriters an option to purchase up to an additional 3.5 million shares at the public offering price.
Independence Air agrees to halt use of iJet term
Independence Air, a low-fare carrier on the East Coast, agreed to stop calling its planes "iJets" to end a trademark lawsuit filed by a travel risk information company.
IJet Travel Intelligence Inc., an Annapolis company that sells the risk information to companies, filed the lawsuit July 7 in Alexandria, Va., accusing Independence Air of infringing its trademark for travel information.
FLYi Inc., the parent of Independence Air, agreed to stop using the iJets name for aircraft and airport services as of Dec. 31. Independence Air spokesman Rick DeLisi said the word was a "nickname" for the Dulles, Va.-based company's planes and "not fundamental to our branding of our airline."
Allegis Group acquires Georgia sales company
Allegis Group Inc. said yesterday that it acquired MarketSource Sales Services, a privately held provider of sales resources and services in Alpharetta, Ga., for an undisclosed price.
Hanover-based Allegis, the nation's largest privately owned provider of staffing services, said the acquisition will expand its contract services and business solution offerings.
Allegis has a network of 220 branch offices in the United States, Canada and Europe. MarketSource will operate as a wholly-owned subsidiary.
IBM to close pension plan to new hires, offer 401(k)s instead
IBM, dogged by complaints about changes it made to its employee pension plan in the 1990s, is planning to close the plan to new employees at the end of the year and give all new workers a 401(k) plan instead.
The changes in IBM's plan, in 1995 and 1999, creating hybrids of the traditional pension plan and a 401(k) design, led to protests by older workers, who lost a significant amount of benefits as a result. With the decision to close what is known as a cash-balance plan, the company has completed a decade-long shift.
The cash-balance model was thrown into doubt in 2003, when a federal judge ruled that the changes IBM made to its pension plan in the 1990s caused the plan to discriminate against older workers. Implicit in the decision was the opinion that virtually all cash-balance plans - which cover millions of workers at hundreds of companies - were illegal for the same reason. IBM is appealing.
IBM said that its decision to offer new employees a 401(k) plan was made in an effort to keep its compensation in line with the pay and benefits offered by competitors.
Scrushy is warned against gag-order violations
A federal judge in Birmingham, Ala., threatened to throw HealthSouth Corp. founder Richard Scrushy in jail if he or any member of the defense team violates a pretrial gag order again, a spokesman for Scrushy said yesterday.
U.S. District Judge Karon Bowdre held a hearing yesterday with Scrushy, his lawyers and his spokesman to determine whether to bring sanctions against anyone for comments made to the Birmingham News that were critical of the government's case. An April order limits what parties in the case are allowed to say.
The order says only Scrushy may make public statements about charges accusing him of masterminding a $2.7 billion accounting fraud. On Tuesday, the News reported that defense lawyer Art Leach said an FBI affidavit supporting a search warrant for HealthSouth's headquarters was "based on lies and inconsistencies."
Fannie Mae agrees to pay government $7.5 million
Fannie Mae, the largest source of money for U.S. home mortgages, agreed yesterday to pay the government $7.5 million after failing to disclose the sale of fraudulent loans by one of its authorized lenders, First Beneficial Co.
A federal judge in Charlotte, N.C., concluded in October that Fannie Mae sold back loans by First Beneficial Mortgage Co. that it knew were fraudulent without notifying regulators of the fraud.
First Beneficial subsequently resold some of the loans to the Government National Mortgage Association, a government agency, which lost about $30 million as a result of the purchase. Fannie Mae was ordered to pay $6.5 million.
The $7.5 million forfeiture includes the $6.5 million that the principals at First Beneficial obtained through fraud, plus $978,328 in stipulated interest.
Financier's diamonds auctioned in New York
Hundreds of diamonds seized from disgraced financier Martin Frankel went on sale in New York yesterday at an auction intended to provide restitution to the victims of his schemes.
More than 300 bidders - mainly diamond dealers, with a sprinkling of men seeking a gift for a wife or girlfriend - filled a hall at the Jacob K. Javits Convention Center on the first day of a two-day auction of 822 diamonds that Frankel had bought with his ill-gotten gains.
In 1999, Frankel triggered an international manhunt when he disappeared from his mansion in Greenwich, Conn. He was arrested in Germany four months later. Prosecutors said he looted hundreds of millions of dollars from insurance companies.
Frankel, 50, pleaded guilty to fraud and racketeering in 2002 and will be sentenced tomorrow in New Haven, Conn.
Paper Mate to enter inkjet cartridge market
Newell Rubbermaid Inc.'s Paper Mate division, which makes writing instruments, said it is entering the $15 billion inkjet printer cartridge market.
Paper Mate will license Legacy Manufacturing LLC to produce a line of Paper Mate inkjet printer cartridges, the company said yesterday. The cartridges will be on the market in January.
Movie studios' DVD agency sues theater jukebox maker
The DVD Copy Control Association, an arm of Hollywood studios, has filed a breach-of-contract lawsuit against Kaleidescape Inc. in Santa Clara County (Calif.) Superior Court, to halt sales of the company's high-end home theater jukebox system, which it alleges makes illegal copies of movie DVDs.
The association alleges that its proprietary copy protection technology of movie DVDs, known as the Content Scramble System, is being misused in the Kaleidescape System that makes permanent copies of movie DVDs onto a hard drive and allows users to access the video library from anywhere in a home.
The systems start at $27,000 for one that can store up to 160 movies.
Nortel Networks revises '03 restatement estimate
Nortel Networks Corp., which is trying to resolve an accounting mess that will result in restatements of prior years' earnings, expects a 28 percent reduction in previously announced net earnings for 2003, compared with its previous estimate for a 35 percent reduction.
The Canadian telecommunications company said yesterday that the amount of the reduction in 2003 net earnings will largely be reported in prior periods. Nortel said it will reduce previously reported net losses for periods which include 2002 and 2001.
Adjustments identified will include increases to previously announced annual revenue of about 9 percent in 2001, 3 percent in 2002 and 5 percent in 2003.
This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.