Wednesday PM March 21st, 2007

CSB report on BP Texas City blast approved by full board...UC says appeals ruling dropping class action status should not interfere with earlier Enron shareholder settlements...EGL mulls bigger buyout offer...

The U.S. Chemical Safety and Hazard Investigation Boardξlast nightξapproved the report by federal investigators into the 2005 BP Texas City refinery explosion. Approval followed comments from BP employees and Texas City residents atξtheir eveningξpublic hearing. Eva Rowe, whose parents were killed in the blast, told the board that she believes her parents were murdered. She made those comments at a recent event where she announced millions in donations to area charities.

"You know, they do want to, I guess, make the community see that, 'oh, we're not such a terrible company,' but I don't want to promote BP at all. My personal feelings towards BP aren't a positive one. I feel like they're murderers."

Human error, fatigue, budget cuts and the disregard of warning signs are in the report. CSB chair Carolyn Merritt blames BP management for long-standing disregard for refinery safety and blames OSHA for lax regulatory oversight.

"The chemical Safety Board concluded that the tragic accident at BP's Texas City refinery was caused by organizational and safety deficiencies at all levels of the BP corporation. In addition, we found regulatory oversight of refinery workers by the U.S. Occupational Safety and Health Administration, or OSHA, needs to be improved."

BP's Ronnie Chappell says BP strongly disagrees with some findings and conclusions of the CSB report. The 335-page report comes nearly two years to the day after the blast that killed 15 workers and injured dozens more.

An appeals court ruling that Enron shareholders cannot pursue a class action lawsuit against investment banks should not interfere with billions in settlements the suit already has generated. The University of California has negotiated settlements totaling $7.3 billion with JPMorgan Chase, Canada Imperial Bank of Commerce and Citigroup. The withdrawal of class action status by the 5th U.S. Circuit Court of Appeals protects Merrill Lynch, Credit Suisse Group and Barclays from facing liability for Enron's accounting practices. The appeals court reversed a ruling by U.S. District Judge Melinda Harmon in Houston, who has indefinitely delayed the April trial date for the Enron shareholder lawsuit. Policyholders attorney William Lerach expressed disappointment, saying he and other shareholders' attorneys are likely to appeal the ruling to the U.S. Supreme Court. Investors are trying to recover as much as $40 billion in losses.

Houston-based freight-forwarding company EGL has decided to recognize an offer made by New York-based Apollo Management for $40 a share, according to the Houston Chronicle. That follows an earlier announcement that the company's CEO and his private equity investors would acquire EGL in a $1.7 billion transaction valued at about $38 per share.

No change. That's the word on interest rates from Federal Reserve policy makers after wrapping up a two-day session. The federal funds rate--the interest that banks charge each other--has been at 5.25 percent since last June when the central bank capped a two-year, credit-tightening campaign with its 17th consecutive quarter-point rate hike. As it announced its decision, the Fed said it will continue to monitor inflation, which continues to be elevated and may fail to moderate as expected.

A national nonprofit charter school organization says it has raised $65 million toward a $100 million goal to greatly expand its presence in the Houston area. Starting this summer, officials with the nonprofit Knowledge is Power Program Foundation--or KIPP--say the money will be used to expand the Houston chain from eight schools and 1,700 students to 42 charter schools with 21,000 students over the next decade. KIPP was founded in Houston in 1994 as an alternative to the public school system for students in kindergarten through high school. The system now has 52 schools in 16 states and Washington, D.C., serving 12,000 students--the majority of them low-income and either black or Hispanic.

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