Thursday February 9th, 2006
by: Ed Mayberry, February 9, 2006 5:02:00 am
The former Enron investor relations chief testified today that Wall Street questioned the strength of some Enron businesses in March 2001. Mark Koenig says the questions came despite assurances from Enron founder Ken Lay and Enron's then-CEO Jeff Skilling that all was well. In response to defense cross-examination by Skilling's attorney Daniel Petrocelli, the prosecution witness testified he had no doubt then that Skilling believed in the company wholeheartedly. The testimony came in Koenig's sixth day on the witness stand in Lay and Skilling's federal fraud and conspiracy trial in Houston. Cross-examination has been passed to Lay attorney Mike Ramsey, and more archived earnings release calls are being played in their entirety. Koenig pleaded guilty in August 2004 to aiding and abetting securities fraud for lying to investors about Enron's finances. He's among 16 ex-Enron executives who have pleaded guilty to crimes and are cooperating with prosecutors.
Krispy Kreme stores in Houston will close bu March 8th as part of a legal settlement between Krispy Kreme Doughnuts and its Houston franchise Lone Star Doughnuts, according to the Houston Chronicle. The franchisee had sued Krispy Kreme, claiming the chain pressured Lone Star to open new stores and threatened to declare a default if it refused. Court documents also claim Krispy Kreme forced Lone Star to buy unnecessary equipment. Krispy Kreme says it plans to reopen stores in Houston.
Iraqi delegates say Iraq desperately needs U.S. investmentin rebuilding oil and gas infrastructure. The Iraqi officials are visiting Houston and spoke with the Associated Press yesterday on condition of anonymity because of security concerns. They said Iraq needs at least $20 billion of foreign investment, but that number could more than double as conflict with insurgents persists. Threats of violence loom daily and repeated insurgent attacks on the nation's pipeline systems keep investors leery. So far, the U.S. has spent nearly $2 billion on Iraq's oil and gas infrastructure, according to an audit by the Special Inspector General for Iraq Relief and Reconstruction Fund.
Texas is getting about $15 million more from the federal government to pay for recovery from Hurricanes Katrina and Rita. U.S. Senator John Cornyn says the reimbursement money will help pay for shelters, debris removal and related protections. Katrina hit the Gulf Coast on August 29th. Then Rita pounded Southeast Texas on September 24th. Cornyn says the Federal Emergency Management Agency funds include $2 million to reimburse the Ark-Tex Council of Governments for costs from interim housing, $1.6 million to Dallas for sheltering costs, $2.4 million to the Jasper Newton Electric Co-op, for equipment and labor costs connected to debris removal following Rita and $7.8 million to Lamar University in Beaumont for protective measures and restoration after damages from Rita.
Attorneys for thousands of people claiming injury from an Exxon chemical plant fire 12 years ago are trying to keep their lawsuit from being dismissed. Last month, U.S. magistrate Stephen Riedlinger in Baton Rouge, Louisiana, recommended dismissing the suit. He said none of those in the class-action suit have proven they were injured by a smoke plume. A final decision would come from U.S. District Judge Barbara Lynn of Dallas, who's overseeing the case. Plaintiff attorneys filed a 32-page objection, saying the magistrate's recommendation was riddled with legal errors. Riedlinger's set a hearing on the objections for February 21st in Baton Rouge. At issue are the claims of nearly 5,700 people who have sued Irving-based ExxonMobil for damages after an August 1993 fire at the Exxon plant in Baton Rouge. Almost 6,200 other people have been identified as having potential claims against the company. A fire burned for several hours and produced a large smoke plume. Area residents have claimed property damage and physical, mental and emotional injuries caused by the fire.
Toyota Motor today unleashed the 2008 Tundra--the company's largest and most powerful full-size pickup. The vehicle was displayed at the Chicago Auto Show. The pickups will be assembled at Toyota plants in San Antonio and Indiana. Toyota says every part will be built in the U.S. The new Tundra will go on sale in about 11 months. Toyota offered the first-generation Tundra in 1999. The company says it's spent years talking with owners about how they use their vehicles and making improvements. For example, the handles on the 2008 Tundra are wide enough that a driver can open the door with work gloves on. The console is deep enough to hold a laptop computer.
A Finnish maker of cell phone parts and other electronic accessories is laying off about 1,250 workers from its plant in Fort Worth. Perlos says it plans to transfer production to a new facility in Reynosa, Mexico. Officials with Perlos say the measures, to be completed by the end of June, could save the company nearly $18 million annually. Construction on the new plant in Mexico began last year. Perlos arrived in Fort Worth in 1995 and eventually expanded into a 181,000-square-foot facility. It was the company's only U.S. plant.
Texas Attorney General Greg Abbott today filed a lawsuit to stop a Colorado-based Internet company from selling personal phone records. The lawsuit filed in Austin alleges USA Skiptrace uses illegal means to obtain the records, in order to sell them for $125--violating the Texas Deceptive Trade Practices Act. Abbott's office says the individuals whose phone records are targeted weren't informed of the activity. USA Skiptrace President John Strange didn't immediately return a call today for comment. The lawsuit is the first one filed by Abbott's office since the Republican announced an investigation and a pledge to crack down on "privacy pirates.'' Violators could face civil penalties between $10,000 to $20,000 per incident. Abbott also is urging consumers to contact their cell phone companies to see if anyone has requested their records.
The latest figures from the government indicate the job market is holding firm. The Labor Department says the number of Americans filing for unemployment benefits edged up only slightly last week. New claims rose 4,000 to 277,000. That is less of an increase than what economists were expecting. The four-week moving average of new claims fell last week to more than 276,000, the lowest since April 2000. The government reported last week that the unemployment rate fell to a four-and-a-half-year low of 4.7 percent in January.
There's some potentially good news for users of the Blackberry wireless device. The device maker Research In Motion says it has developed software "workaround'' designs for the popular handsets in case a court bars the current software because of a pending patent dispute. The continuing court battle has raised fears that Blackberry users might lose access to the service. Rim says although there is currently no injunction in place regarding the patent fight with NTP, it developed the workaround software as a contingency. It promises to post the software on its Web site. The designs are not available to users yet and Rim says there's no need for consumer action yet. Rim says it believes it has "strong legal and factual arguments opposing an injunction.''
Nintendo today announced new wireless features for its DS portable video game player. Beginning in late March, the company plans to deploy electronic kiosks at thousands of U.S. retailers--including Best Buy and Grapevine, Texas-based Gamestop. The features include a free service that lets consumers beam game demos and other content directly to the device. Owners of the dual-screen DS who go near the kiosks will automatically receive a notice on their devices offering game demos, movie trailers and other content for temporary download. The information will be erased from the DS once it's turned off.
A well-known critic of Merck and Company's painkiller Vioxx says he doesn't intend to work as a consultant for the attorney leading numerous lawsuits over the drug. Merck told a federal judge in New Orleans yesterday that a plaintiff's attorney wants the Cleveland clinic's Dr. Eric Topol to be a paid consultant. But Houston attorney Mark Lanier says he hasn't asked Topol to be a consultant. He says Topol has retained him to work on private matters. Topol says he gave his only deposition for the litigation because he was subpoenaed. The recorded deposition was expected to be played today in a retrial underway in New Orleans. Vioxx was removed from the market in 2004 after a study showed it increased the risk of heart attacks and strokes.
Whole Foods Markets says its profit leaped 26 percent in the latest quarter, thanks to record average weekly sales. The Austin-based natural and organic food supermarket chain says its earnings for the fiscal first quarter ended January 15th climbed to $58.3 million. Total sales jumped 22 percent to $1.67 billion, while same-store sales vaulted 13 percent. It was the ninth consecutive quarter of double-digit percentage same-store sales results. The per-share results fell a penny short of the average analyst estimate in a Thomson Financial survey, but sales matched expectations. The stock has risen sharply in the last year--as much as 74 percent--but has declined nine percent since January amid concerns about higher costs hurting profit margins. The company has struggled with local regulatory issues as it tries to open stores on prime real estate in dense, urban and suburban areas.
Belo Corporation today posted a fourth-quarter profit 25 percent below the previous year's quarter as revenue edged lower. The Dallas-based publisher of the Dallas Morning News and other newspapers and owner of television stations says income fell to $39.9 million. Revenue edged down less than one percent to $410.7 million. Analysts surveyed by Thomson Financial, on average, expected Belo to post revenue of $403.5 million. For the full year, Belo's profit fell four percent to $127.7 million. Annual revenue was essentially flat at $1.52 billion. But Belo Chief Executive Robert Decherd says the company's 2005 financial performance "was solid, achieving record revenues for a non-political year.''
Comptroller Carole Keeton Strayhorn says the Texas treasury has a $4.3 billion surplus--and she points to an "uptick'' in the economy. Of the amount, $1.9 billion is earmarked for education and tax reform. A pharmacy school in Kingsville that's been built but has no operating funds and nursing homes top the priorities issued by Governor Rick Perry. Both officials are Republican, although Strayhorn is challenging Perry as an independent candidate for governor. Perry's office attacked Strayhorn for the surplus and said she should have known about the additional money months ago. Legislators wrote the two-year spending plan based on the amount Strayhorn told them the state would take in during the period. Strayhorn reviewed the budget in June and certified it. Her latest estimate represents the calculations she used.