Jeff Skilling to report to Minnesota prison on December 12th…Clear Channel Communications to be sold to private investors; radio group will continue to field competing bids…Halliburton subsidiary KBR debuts on New York Stock Exchange…
The government and former Enron CEO Jeff Skilling have a deal to clear the way for a separate $85 million settlement to proceed. The U.S. Labor Department says the deal would bar Skilling from ever overseeing a company’s employee benefit program and waive his right to pension benefits. To take effect, the proposed deal must be approved by a Houston federal judge. Skilling was convicted in May of conspiracy and fraud for his role in the Houston energy company’s accounting scandals that came to symbolize corporate fraud in America. The company’s collapse wiped out thousands of jobs and more than $2 billion in employee pension plans. Skilling was sentenced last month to more than 24 years in prison. The Labor Department sued Skilling and others in 2003 for alleged mismanagement of Enron’s pension and benefit plans. The proposed settlement would resolve the department’s civil action against him.
Jeff Skilling has been ordered to surrender to a Minnesota prison next month. U.S. District Judge Sim Lake ordered the former Enron CEO to report to a prison in Waseca, Minnesota, about 75 miles south of Minneapolis, by 2 p.m. on December 12th. Skilling was convicted in May of 19 counts of fraud, conspiracy, insider trading and lying to auditors after a four-month trial. Judge Lake last month sentenced Skilling to 24 years and four months.
The nation’s largest radio station owner, Clear Channel Communications, announces it has a deal to be sold to a group of private investors. The group led by Thomas H. Lee Partners and Bain Capital Partners is paying nearly $19 billion, and is assuming $8 billion in debt. In a statement, San Antonio-based Clear Channel says shareholders will get $37.60 in cash. The agreement allows Clear Channel to continue to field competing bids. Clear Channel also says separately that it will seek buyers for 448 radio stations in smaller markets as well as for its 42 station television group. It says the properties combined contributed less than ten percent of the company’s revenues last year. Clear Channel owns or operates 1,200 radio stations. It also owns a majority of Clear Channel Outdoor, the outdoor-advertising segment that sells billboard and bus stop ads.
Houston-based Halliburton subsidiary KBR debuted on the New York Stock Exchange today, with shares opening at $21. The IPO spins KBR off from Halliburton, separating assets and businesses. The launch of the IPO follows an appeal from the UK Ministry of Defence this week to delay filing the offering so it could investigate KBR’s proposed spin-off from Halliburton. KBR was formed by the M.W. Kellogg Company and Brown & Root.
Houston-based Motiva Enterprises has been authorized to proceed with expansion of its Port Arthur refinery by the Texas Commission on Environmental Quality. The project is expected to generate more than 3,500 construction jobs and about 300 new permanent jobs upon completion in 2010. Motiva says the expansion will make the refinery the largest in the United States and one of the largest in the world. Motiva is a refining and marketing joint venture owned by affiliates of Shell Oil and Saudi Refining.
Marathon Oil and Ohio-based The Andersons will begin construction of an ethanol plant in Greenville, Ohio, with the facility starting operations in the first quarter of 2008. Marathon Petroleum is a 50 percent operator of the joint venture company Andersons Marathon Ethanol. Property was purchased in September. The plant will employ about 40 employees.
Amarillo city officials are urging the National Nuclear Security Administration to bring a new plutonium facility to the nearby Pantex nuclear arms plant. The Pantex plant is one five sites under consideration for a facility dedicated to plutonium research and manufacturing plutonium weapons cores. But not all Amarillo residents are in favor. Some speakers at a public hearing raised concerns about the possible environmental ramifications of bringing the project to the area. The Nuclear Security Administration is part of the Department of Energy. Officials were taking comment as the agency develops an environmental impact statement on its plans for modernizing the U.S. nuclear weapons complex by 2030. The plant is operated by BWXT Pantex for the Energy Department. A Pantex official estimated about 1,000 jobs would be created if the company receives both projects.
A South Korean court has issued arrest warrants for two executives of Dallas-based private equity group Lone Star Funds to face charges of stock price manipulation and misrepresentation. The arrest warrants were issued for Lone Star Funds Vice Chairman Ellis Short and Michael Thomson, its general counsel. Short says the warrants were issued because he and Thomson didn’t comply with a summons to appear for questioning earlier this week. He says they didn’t comply because prosecutors threatened to put them in jail if they came to Korea for questioning. He calls that “simply not acceptable.”
Computer giant Dell has a double dose of bad news. It says federal regulators have begun a formal investigation into the company. Round Rock-based Dell also postponed this week’s planned release of its third quarter earnings report. The report won’t be released until later this month. The company says the delay is unrelated to the widening Securities and Exchange Commission probe. A company spokesman tells the Associated Press that Dell does not know what the SEC is investigating. Enderle Group analyst Rob Enderle says it is too early and there just isn’t enough information to know the implications of the formal investigation. But he calls it “pretty serious”. Dell has yet to file its second quarter earnings with federal regulators because it has been trying to resolve unspecified accounting issues with its internal audit committee.