Friday PM September 7th, 2007
by: Ed Mayberry, September 7, 2007 5:09:00 am
TXU shareholders today approved the sale of the largest power generator in Texas for $32 billion in one of the largest private buyouts ever. More than 95 percent of the shares that were voted favored the merger. Under Texas law, Dallas-based TXU needed approval from the holders of two-thirds of its shares to go ahead with the sale. The investors are led by two private equity firms, New York-based Kohlberg Kravis Roberts and Fort Worth-based TPG. They hope to get the last regulatory approval and complete the deal in the next few weeks. KKR and TPG plan to borrow up to $37 billion to swing the deal, in which they will also assume about $13 billion in old TXU debt. KKR and TPG also still need approval from the Nuclear Regulatory Commission to take over TXU's nuclear power plant near Glen Rose, southwest of Fort Worth.
Enron's former chief executive is appealing the criminal convictions that sent him to prison for more than 24 years. Jeff Skilling is seeking a new trial, citing profound, inherent weaknesses in the government's case. He filed with the U.S. Fifth Circuit Court of Appeals in New Orleans. Last year, an appeals court judge denied Skilling's bid to remain free pending the results of his appeal, but referred to what he called "serious frailties" in the legal theory the federal prosecutors used to convict Skilling on a conspiracy charge. Defense lawyers say they'll use that as a wedge to cast doubt on the merits of Skilling's fraud and insider trading charges. They contend Skilling's prison sentence is four times longer than any other former executive at Enron, and six years longer than the average federal sentence for murder. Skilling is the highest-ranking executive to be punished for the accounting tricks and shady business deals that led to Enron's downfall. Thousands of jobs were lost along with more than $2 billion in employee pension plans. Skilling was convicted along with company founder Ken Lay last year on 19 counts of fraud, conspiracy, insider trading and lying to auditors. Lay died before his sentencing date. And Skilling reported to a federal prison in Minnesota in December. The Justice Department will respond with its own court filing as early as next month.
BP executives rejected a $150,000 budget request in 2002 that could have helped prevent the 2005 explosion that killed 15 people, according to testimony in the trial of a lawsuit by four workers. The explosion happened after equipment overfilled with flammable liquids, and vented vapor ignited during startup of a unit that boosts octane. Investigators have said a flare could have burned off the excess liquid. In an e-mail presented as evidence, a BP engineer recommended against the expense because flares were not mandated by the government. The former head of BP's Texas City facility has testified that the refinery was making profits of more than $1 billion a year. Don Parus is one of four senior executives targeted to be fired after an internal investigation earlier this year. He has been on paid leave since May 2005.
Opening statements begin on Monday in the conspiracy trial of Houston oilman Oscar S. Wyatt, Jr., charged with offering millions in kickbacks to Iraqi officials in the UN Oil-for-Food program. Prosecutors say Wyatt wanted to win lucrative oil contracts from Saddam Hussein's regime. Twelve jurors and six alternates were selected for the trial in New York. Prosecutors say they will present evidence that Wyatt encouraged opposition to the 2003 U.S. invasion of Iraq and bragged about his influence to Iraqi officials to win oil contracts. Defense lawyers plan to portray Wyatt as a victim of a prosecution that came about after his outspoken criticism of President Bush and his administration. Wyatt has been free on bail since he was charged with conspiring with others to gain favored status for oil contracts.
The Federal Motor Carrier Safety Administration says 38 Mexican firms are poised for U.S. permits as part of pilot program allowing them to transport cargo anywhere in the United States. The U.S. Transportation Department issued the first permit to Transportes Olympic, based in a suburb of Monterrey, Mexico. It won the permit after Mexico granted authority to Stagecoach Cartage & Distribution of El Paso to travel anywhere in Mexico. Officials say both companies can cross the border immediately but may not do so for several days while they determine new routes. The U.S. plans to give as many as 25 Mexican firms permission by the end of September and add another 25 companies each month until hitting 100 by the end of this year. Mexico has also committed to allow as many as 100 U.S. firms anywhere in Mexico by the end of this year. Freight and delivery service truck drivers in California and Texas have denounced the program allowing Mexican trucks in the country. They contend the trucks are dangerous and the move is unfair.
Retail gasoline prices rebounded upward statewide this week. The weekly AAA Texas Gas Price Survey finds the average price of regular self-serve across the state climbed two cents from last week to $2.69 per gallon. The national average rose four cents to $2.81 per gallon. Auto club spokeswoman Rose Rougeau says refiners "should begin to have an easier time supplying fuel'' after they switch over from producing cleaning-burning summertime blends. She says motorists will have to wait to see if that translates into lower retail gasoline prices. Houston has the cheapest gas this week at $2.59 per gallon. That's virtually unchanged from last week. Amarillo remains the Texas city with the most expensive gas. It's average price rose four cents to $2.97.
Federal officials say a Texas oil company has agreed to pay $504,000 in penalties for five oil spills in 2005 and 2006. The U.S. Department of Justice and the Environmental Protection Agency say Meridian Resource & Exploration also must do a better job of preventing spills in the future. Houston-based Meridian operates a facility at Weeks Island in Iberia Parish, Louisiana. Company officials did not immediately return telephone calls seeking comment. Regulators say the company was responsible for five "unauthorized discharges of crude oil'' between November 2005 and November 2006. In all, the spills dumped about 747 barrels of oil into Weeks Bayou and the Intracoastal waterway.
Equity Mortgage and Carlisle Homes are hosting a homebuyer certification class tomorrow at the Southridge Crossing subdivision at Beltway 8 and Mykawa. The class enables certain homebuyers to be eligible for up to $40,000 in down payment assistance.