Lone Star Funds responds to South Korea’s attempt to arrest company officials…Jeff Skilling files notice to appeal…Enron strikes deal to collect on Ken Lay life insurance policy…
Lone Star Funds is taking aim at South Korean prosecutors. The Dallas-based private equity firm accuses the prosecutors of “baseless accusations” in their attempt to arrest company officials. The statement was in response to prosecutors’ announcement that they were seeking the arrest of the head of Lone Star’s local unit for alleged stock price manipulation. The prosecutors also said they were seeking the arrest of two other current and one former official at Lone Star. Lone Star Chairman John Grayken says the firm “will vigorously defend our company and our officers from these baseless accusations.” The South Korean Supreme Prosecutors’ Office denies any political motivation. It’s been investigating allegations Lone Star acted with former Korea Exchange Bank managers and government officials to misrepresent the bank’s financial health to cut Lone Star’s purchase price for the lender. Prosecutors also are investigating allegations that KEB and Lone Star jointly manipulated the stock price of KEB’s credit card unit in 2003, ahead of the bank’s merger with it.
Former Enron CEO Jeff Skilling has officially filed notice that he will appeal his convictions. He says he will also challenge U.S. District Judge Sim Lake’s refusal to allow him to remain free on bond during appeal. Judge Lake sentenced Skilling to 24 years and four months in prison for his role in Enron’s downfall. A jury in May convicted him of 19 counts of fraud, conspiracy, insider trading and lying to auditors.
Enron has struck a deal to collect $250,000 on a life insurance policy covering founder Ken Lay. A bankruptcy judge in New York on Thursday is scheduled to consider the settlement involving Enron and Transamerica Occidental Life Insurance Company. According to court documents, a Texas partnership bearing the initials of Lay and his wife, Linda, obtained a life insurance policy for Lay. But under a deal with the company in 1996, the partnership granted Enron the right to a portion of the insurance proceeds in the event of Lay’s death. Lay died in Colorado in July–of heart trouble–just weeks after a jury in Houston convicted him of fraud charges related to the company’s 2001 collapse. Lay died before he could appeal. His convictions were later voided.
A closely followed gauge of the nation’s manufacturing sector shows slowing growth. The Institute for Supply Management index for October is put at 51.2. That is down more than a point and a-half from the previous month and weaker-than-expected. Any number above 50 indicates growth. The level of manufacturing growth is said to be the lowest since June 2003. The group’s prices index dropped sharply, indicating some relief on the inflation front.
Goodyear Tire and Rubber previously refused to release details about its contract offers to striking workers. But the Ohio-based company said its latest proposal would not cut wages and would close just one plant. Goodyear official Jim Allen says the latest offer would maintain medical benefits–with a $2 per week increase in premiums for single associates, and $6 to $9 per week for families. The measure included an increase in capital investments for plants and would propose job security provisions at all major U.S. plants–except in Tyler. That site is expected to close and eliminate 1,100 jobs. Union members have said Goodyear’s final contract offer included pay and benefit cuts and the threat of closures in Tyler and Gadsden, Alabama. USW Vice President Tom Conway says the starting point to a new agreement is–no plant closings.
Toyota Motor Manufacturing-Texas has donated 550 acres of riverfront land to San Antonio. The move comes just weeks before the grand opening of its Toyota Tundra plant. The land north and south of Toyota’s new manufacturing plant, which is set to open November 17th, will be preserved by the city in its natural state for the public’s use. The plant sits on more than 2,000 acres on San Antonio’s south side. The donated land borders Leon Creek and the Medina River. Mayor Phil Hardberger says setting aside land for parks increases the quality of life for San Antonio residents. Toyota’s top official in Texas–Hidehiko Tajima–says the land is a token of appreciation for the city’s help in making the plant a success.