In The Region
Judge doesn't block Marriott transfer of management pacts
A Massachusetts Superior Court judge denied yesterday a motion by two Marriott International Inc. senior living center operators to block the largest U.S. hotel company from transferring the management contracts on some of the centers, which Marriott is in talks to sell.
Five Star Quality Care Inc. and Senior Housing Properties Trust, two operators of the centers, had obtained a court order Dec. 2 prohibiting Bethesda-based Marriott from completing a sale and transferring the contracts. But Judge Linda Giles ruled yesterday against a preliminary injunction, saying the lawsuits don't show "a reasonable likelihood of success."
Senior Housing and Five Star will still go forward with a lawsuit to block the transfer of the management contracts, a Five Star executive said.
Xerox discovers accounting error in interest expense
Xerox Corp., which was fined $10 million earlier this year for faulty financial practices, said yesterday that it has discovered an accounting error which resulted in the company understating its interest expense.
Xerox said the error involved the calculation of interest expense related to a debt instrument and associated interest rate swap agreements.
The error was identified by the company and occurred in January last year, Xerox said. It resulted in an after-tax understatement of interest expense of $5 million to $6 million, or less than 1 cent per share, in each of the four quarters of 2001 and the first three quarters of 2002.
To adjust for these items, Xerox will redo its 2001 and 2002 financial statements.
AT&T to cut jobs in business services
AT&T Corp. told employees yesterday that it plans to cut an unspecified number of jobs in its business services division next year.
AT&T spokesman Dan Lawler said the announcement reflected the company's continuing need to cut costs and its ability to use new technologies to automate certain functions.
After the spinning off of AT&T's cable and wireless units, selling network services to big businesses is essential to company success, especially since the market for long-distance calls is under assault from competition and new technologies. Lawler said the cuts could come through layoffs or voluntary programs such as early-retirement packages, but the number that will be necessary has yet to be determined.
AT&T employs 72,000 people overall. At the end of 2001, the business services division had 57,500 people.
Ford to settle claims about its SUV ads
Ford Motor Co. will pay $51 million to settle claims by state attorneys general that the company's advertising fails to disclose the rollover risk involved with driving sport utility vehicles, Ford Vice President and General Counsel Dennis Ross said yesterday.
The money will be shared among each of the 50 states, the District of Columbia, Puerto Rico and the Virgin Islands.
2 Tenet founders lose case over stock options
Tenet Healthcare Corp. was cleared by a state court jury in Los Angeles yesterday in a civil case filed by two of the company's founders over the exercise of $19 million of stock options.
The jury ruled 9-3 against Richard Eamer, 74, and Leonard Cohen, 76, who founded National Medical Enterprises in 1969. The pair left the company in 1991 but remained as consultants. The company's name was changed to Tenet in 1995.
The two men claimed that as part of their consulting contract, they were granted stock options that expired in 10 years, and tried unsuccessfully to exercise their options in 2001, when Tenet's stock was trading over $60 a share. Tenet claimed the options expired in 1996.
This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.