Former Enron chief accountant Richard Causey slated to begin 66-month prison term…AT&T closes $85 billion stock-for-stock acquisition of BellSouth…Comcast takes over as cable provider for Houston’s Time-Warner customers…
Former Enron Chief Accounting Officer Richard Causey is beginning his 66-month prison term for securities fraud, surrendering to a federal prison camp in Bastrop. Causey pleaded guilty just weeks before he was to face trial alongside former Enron executives Jeff Skilling and Ken Lay on conspiracy and fraud charges. Skilling is serving more than 24 years in prison. Lay died of heart disease in July, less than two months after a jury convicted him and Skilling of misleading shareholders and employees about Enron’s financial problems. Former Chief Financial Officer Andy Fastow was sentenced last September to six years in prison.
Citigroup, JPMorgan Chase and other defendants have agreed to pay Ohio state pension funds $4.5 million to settle any liability related to the fraud that destroyed Enron, according to Bloomberg. The funds have asked a federal judge in Houston to dismiss their claims against the banks as part of a December 15th agreement. The Ohio pension funds pursued claims separately from Enron investors who have recovered more than $7 billion in their case against former Enron banks, law firms and officers. Citigroup and JPMorgan previously settled claims by investors.
San Antonio-based AT&T has closed its $85 billion stock-for-stock acquisition of BellSouth. AT&T has about 6,600 employees in the Houston area. AT&T now has full ownership control over Cingular, which will transition over to the AT&T brand sometime in early 2007. By adding the operations of BellSouth’s nine-state territory, AT&T now provides local telephone service to 22 states. AT&T plans to lay off nearly 10,000 people over the next three years to eliminate redundant positions.
Comcast and Time-Warner have completed their redistribution of assets in Kansas City, south and west Texas and New Mexico. As part of the deal, Comcast is now the cable provider for some 790,000 Time-Warner subscribers in the Houston area. As part of the agreement to reallocate the assets of the partnership between the two companies, Comcast gets the economic interest in the Houston pool, while Time-Warner receives the economic interest in the Kansas City pool. Comcast has 24.1 million cable customers nationwide and Time-Warner has 13.5 million subscribers in 33 states.
North Carolina-based Duke Energy officially spun off its gas transmission business into Spectra Energy, which will begin trading on the New York Stock Exchange on Wednesday. Spectra operates about 17,500 miles of transmission pipelines and 250 billion cubic feet of storage in the U.S. and Canada.
Goodyear Tire & Rubber employees are back on the job after a three-month strike against the world’s third largest tire maker. Some workers say it will take time to mend wounds with management. It could be weeks before Goodyear returns to full production. Workers at 12 plants in ten states–including a unit in Tyler, Texas–began returning today. The Akron-based tire maker says full supply of Goodyear products won’t be available for one month or more. The three-year agreement covers 14,000 employees and includes plans to close a Texas tire factory and creates a billion health care fund for retirees. The contract was approved by a two-to-one margin. The company says the pact will help reduce its costs by $610 million over three years and $300 million a year thereafter. Goodyear is third among the world’s biggest tire makers after Japan’s Bridgestone and France’s Michelin.
The Coast Guard says a ruptured pipeline 30 miles south of Galveston has been secured. The High Island Pipeline was sealed using an inflatable buoy as a temporary measure to stop the flow of oil. Plans to permanently repair the pipeline are being developed. Some 44,500 gallons of oil has been released since the rupture.
A search committee is seeking potential candidates to replace Greater Houston Convention & Visitors Bureau President and CEO Jordy Tollett, who has resigned after ten years in those positions. Tollett says he resigned to pursue other ventures, but will stay on as an independent contractor for the GHCVB until 2008. In November, Mayor Bill White called for the bureau’s board to find candidates to replace Tollett when his contract expired in February. GHCVB Chairman Doug Horn and Chairman Emeritus Don Henderson will coordinate operations at the bureau until the position has been filled.