Business Browser: Ebbers loses appeal (4:10 p.m.)
Supreme Court turns down Ebbers' appeal
edmontonjournal.com
Published: Monday, March 05, 2007
WASHINGTON (AP) — The U.S. Supreme Court turned down an appeal Monday
from former WorldCom chief Bernard Ebbers, who is serving a 25-year prison
sentence for fraud and conspiracy.
The justices rejected without comment Canadian-born Ebbers’s bid for
review of his 2005 conviction based on his contention that he was denied a
fair trial.
Ebbers, who grew up in Edmonton, argued in court papers that the trial judge
improperly allowed prosecutors to use testimony from witnesses who had been
given immunity, but denied immunity to potential defence witnesses.
The judge also instructed jurors that they could find Ebbers guilty if they
believed he suspected a crime was being committed but intentionally looked
the other way.
A federal appeals court upheld the conviction last year, acknowledging that
Ebbers’ sentence for a white-collar crime was longer than sentences routinely
imposed by many states for violent crimes. The 2nd U.S. Circuit Court of Appeals
said Ebbers’ actions to hide WorldCom’s financial problems were
substantial, and had cost investors dearly.
Ebbers was convicted for his role in the massive fraud that drove Clinton,
Miss.-based WorldCom into bankruptcy in 2002. He is serving his time at a low-security
prison in Oakdale, Louisiana, and is scheduled to be released on July 4, 2028,
according to the U.S. Bureau of Prisons Web site.
Investigators uncovered $11 billion in fraud at WorldCom Inc., much of it because
accountants were classifying regular expenses as long-term capital expenditures.
The company re-emerged under the name MCI. Verizon later bought MCI.
In 2005, the court unanimously threw out the conviction of the Arthur Andersen
accounting firm for destroying Enron Corp.-related documents because the jury
instructions were too broad.
MARKHAM, Ont. (CP) — Osprey Media Income Fund (TSX:OSP.UN) is considering
strategic alternatives, which could include the possible sale of the Toronto-area
based newspaper company.
Osprey said late Monday its board of trustees will go ahead with a plan to
review strategic alternatives to enhance the company’s stock price in
the wake of the planned new federal taxes on existing income trusts.
The company said its board has set up a special committee of trustees to supervise
the process and has hired CIBC World MArkets Inc. (TSX:CM) as financial adviser.
The company did not say what measures it will consider, but strategic reviews
often lead to the sale or merger of a company, a major new investment or alliance,
or in the case of trusts, the possible conversion back into a corporate structure.
“
The strategic review process is intended to consider the complete range of
alternatives in light of the new environment facing the income trust sector,” the
company said.
“
It is noted, however, that there can be no assurance that the evaluation process
will result in any transaction.”
Osprey said its board of trustees and management periodically review measures
to boost the company’s value, currently about $272 million on the stock
market. However, the company decided to formalize and speed up the process
in the wake of federal Finance Minister Jim Flaherty’s decision announced
last Oct. 31 to begin taxing existing income trusts in 2011.
The special board committee of trustees will be made up of chairman James Wallace,
Mark Davis and Jerry Patava, Osprey said.
The company is one of Canada’s biggest publishers of daily and non-daily
newspapers, magazines and specialty publications. Osprey, which emerged from
the former Hollinger newspaper group in Ontario and was spun off into an income
trust, owns 21 dailies and 33 non-daily papers, as well as shopping guides,
magazines and other publications.
The strategic review process was announced after the close of stock trading
Monday. Earlier, Osprey’s units closed unchanged at $5.55.
TORONTO (CP) — Biovail Corp. (TSX:BVF) has settled a patent dispute with
generic drug makers that will fend off competition for one version of its anti-depressant
Wellbutrin XL until 2008.
The settlement grants an exclusive licence to Anchen Pharmaceuticals LLP, Impax
Laboratories Inc., Watson Pharmaceuticals Inc. and Teva Pharmaceutical Industries
Ltd. to sell a generic version of its 300-milligram anti-depressant.
Biovail said it expected it to have a positive effect on its 2007 revenues
for the Wellbutrin XL product line.
Wellbutrin XL is a once-daily treatment for adult depression and a key seller
for Biovail, making up more than 35 per cent of its sales and pulling in revenues
of US$317.3 million in 2005.
The company was “assessing this development and all other components
of its financial guidance for 2007, and will provide an update concerning 2007
guidance, if necessary,” when it releases its fourth quarter and full-year
2006 earnings on March 15.
Merrill Lynch analyst Hari Sambasivam said the key portion of the agreement
for Biovail is that the counter-parties have agreed not to launch a generic
version of Wellbutrin XL 150 milligram until 2008.
“
We view the agreement positively for Biovail as it will delay the entry of
generics for 150 mg strength, allow Biovail to maintain some share of the Wellbutrin
franchise by launching the Wellbutrin salt with a marketing partner and improve
the visibility of the dividend in the near term.”
The brokerage has made no changes to its 2007 estimates for the company, however,
and is keeping them at revenues of $821 million and earnings per share of $1.71.
Biovail’s previously announced guidance for 2007 included total revenues
of $800 million to $850 million and earnings per share of $1.70 to $1.80
Mississauga, Ont.-based Biovail began a patent-infringement suit late last
year against some companies who had sought approval to launch generic versions
of Wellbutrin XL before expiry of the drug’s patents.
The lawsuits had included sparring with the U.S. Food and Drug Administration,
which had argued that Biovail didn’t file its patent lawsuit on 300-milligram
Wellbutrin XL within the 45 days required under the Federal Food, Drug and
Cosmetic Act — opening the doors for the FDA to give Impax Laboratories
Inc. approval for a generic version of the anti-depressant.
A separate litigation around the tentative approval for a version by California-based
Anchen Pharmaceuticals Inc., another generic drug developer, had been going
on since November 2005.
Under terms of Monday’s agreement, Biovail’s legal actions against
Impax and Watson will be dismissed, while generic drug makers Teva, Anchen,
Impax and Watson can sell generics of the 150 mg Wellbutrin XL drug until 2008.
SUNNYVALE, Calif. (AP) — Smart phone maker Palm reportedly is consulting
with investment bankers on its strategic options, ranging from a sale, an investment
by private equity or a purchase of its own.
Beset with growing competition in the cellphone market, Palm Inc. is discussing
its future with bankers at Morgan Stanley, the Wall Street Journal and CNBC
reported Monday, citing unidentified sources.
Palm spokeswoman Marlene Somsak wouldn’t comment Monday on the reports,
citing the company’s policy to not discuss rumours, but she reiterated
the company’s previous position.
“
We’re focused on growing our business and that’s what we’ve
been saying all along,” Somsak said.
The Sunnyvale-based company’s shares soared last week on speculation
it is likely to be acquired. Shares of Palm fell US$1.80, or more than 9.8
per cent, to close at $16.50 Monday, after rising nearly 11 per cent to close
at $18.30 Friday.
Rumours about Palm getting acquired have surfaced frequently in past years
as it has endured the rough-and-tumble of the personal digital assistants market,
and now, the smart phones market.
The latest rounds of speculation have been based more on its takeover appeal
than any public actions the company itself had taken. Palm is profitable and
has a relatively cheap stock price. It also has $500 million in cash.
Up through last December, Palm chief executive Ed Colligan had consistently
stated the company’s goals to continue building its own business despite
some execution speed bumps and stiffening competition from more deep-pocketed
rivals.
Still, speculation of a sell-off gained momentum in February as Palm shares
climbed and a major hedge fund, Galleon Group LP, reported in a securities
filing that it had acquired more than 6.3 million shares, or about 6.2 per
cent of Palm stock. Last week, a technology website Unstrung, citing unnamed
sources, also reported that Nokia Inc. could be a potential buyer.
Palm, which sells the Treo smart phone, has a loyal customer base but faces
tough competition from cellphone makers, including Nokia and Motorola Inc.,
as well as BlackBerry-maker, Research In Motion Ltd.
Apple Inc. also will introduce a cellphone this year that is expected to increase
the competitive stakes.
Analysts last week said a private sale could help Palm, shielding the company
from quarterly scrutiny of its numbers and freeing up the company’s management
to make acquisitions.
Some analysts are skeptical about any of the larger handset makers, such as
Motorola or Nokia, being interested in acquiring Palm.
“
Any of those have the capability to do what Palm does right now, so the question
is, ’What are you really getting when you buy Palm?”’ said
Citigroup analyst Daryl Armstrong.
ATLANTA (AP) — Delta Air Lines Inc., which is operating under bankruptcy
protection, asked for court permission Monday to delay the deadline by which
the company has to exclusively file its reorganization plan and to solicit
acceptance of that plan.
The Atlanta-based airline said the extension — its fourth such request — from
April 16 to June 1 is necessary because a confirmation hearing on its Chapter
11 plan is scheduled for April 25, after the current deadline.
Delta, the third-largest U.S. carrier, is seeking to prevent other competing
plans from being filed until after it has a chance to finish soliciting votes
on its plan, which calls for the airline to emerge from bankruptcy in the spring
as a standalone carrier.
Delta said it is not making the request as a negotiating tactic, and it insisted
it is on course to emerge from Chapter 11 on the schedule it set.
“
The enormous size and vast complexity of these Chapter 11 cases mean that voting
on and seeking conformation of the plan of reorganization will take time,” Delta
said in its motion.
Delta, which has projected it will be worth US$9.4 billion to $12 billion after
it exits bankruptcy, said its request for the extension has the support of
its official committee of unsecured creditors.
A $9.8 billion bid by Tempe, Ariz.-based US Airways Group Inc. to buy Delta
was withdrawn after Delta’s official creditors committee said it supported
Delta’s standalone plan. There has been no indication publicly, thus
far, that any competing plan of reorganization will be filed with the bankruptcy
court.
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