Several directors of AOL Time Warner are seeking to oust the company’s chairman, Stephen M. Case. He is fighting their offensive, according to an article posted on The New York Times website Monday night.
Three people close to the company said the directors may seek Case’s removal when the board meets on Thursday. According to the article, he will likely have enough support to retain his position. He only needs three of the company’s 14 board members on his side in order to remain chairman.
Several institutional shareholders reportedly are angry over Case’s role in AOL’s (AOL) takeover of Time Warner because the shares of the combined companies have slid 70 percent since the deal closed. But the company line is that there is no reason to think Case is leaving, the article said.
The Securities and Exchange Commission and Justice Department are investigating whether AOL inflated its earnings before the acquisition.
Missing dough: Tyco was expected to make public the names of some of the more than 40 employees who received millions of dollars in forgiven loans from the company, two sources said.
The money, from two Tyco (TYC) relocation loan programs meant for top executives, was given to employees “at all levels of management,” one source said. That included assistants to some top managers, a second source said.
The company also released results from an internal investigation that uncovered nearly $100 million in fraudulent bonuses, in addition to the forgiven loans. The report also alleges that the company was saddled with picking up the tab for extravagances including a $15,000 dog umbrella.
The source said the disclosures should not materially affect Tyco’s financial statements because the forgiven loans were included as part of the company’s bottom line on its previous earnings reports.
On the block: Creditors of KirchMedia are set to approve a breakup of the insolvent media rights and television company in a bid to clinch at least a partial sale by late October, sources said.
KirchMedia’s management had hoped the firm could be sold intact, but potential buyers have made clear their interest lies in its 52 percent stake in commercial broadcaster ProSiebenSat1 and its film library.
With creditor approval, investors will be able to buy ProSiebenSat1, providing a strong footing in Europe’s biggest television market, then buy its film rights through a capital increase.
A field of 80 interested parties has been whittled down to three groups, including a consortium of Germany’s Commerzbank (CRZBY) and Sony’s Columbia Tristar (SNE), which is tipped by some observers as the favorite.
New Gateway CFO: Gateway named a former software executive to replace its CFO.
Roderick Sherwood III, who most recently served as CFO of Loudcloud – now Opsware (OPSW) – will assume the top financial job at Gateway Oct. 1, the company said.
Sherwood will replace Joseph Burke, who will become Gateway’s senior VP of business development. Last week, Gateway (GTW) denied rumors that the company was considering going private through a leveraged buyout.
ABN AMRO appeals ruling: The Netherlands’ biggest bank, ABN AMRO, said it would appeal a Dutch regulator’s decision to fine the bank for its role in the controversial listing of shares in the Internet firm World Online in March 2000.
The bank – fined $17,500 last week for allegedly misleading investors with an incorrect opening share price for World Online – rejected the regulator’s ruling and said it would file an appeal within five to six weeks.
ABN AMRO (ABN) helped put together the prospectus for World Online’s disastrous IPO, in which the stock plunged 60 percent in the first few weeks of trade, making it an emblem of the dot-com downturn.
The flotation was made more controversial when World Online founder Nina Brink sold most of her 10 percent stake for just $5.81 per share ahead of the float, angering shareholders who took legal action, though Brink was later cleared of criminal wrongdoing.
Qwest cuts costs: Qwest said it will keep capital spending at a low rate, and sell or shut down unprofitable businesses as it tries to restore its financial health.
Qwest’s (Q) new management team said its capital spending budget will be about 15 to 20 percent of annual revenue for 2002 and going forward, down from 47 percent in 2000 and 43 percent in 2001.
Privatization will prevail: The French government insisted that the debt crisis faced by former state phone monopoly France Telecom (FTE) would not derail plans to privatize electricity giant Electricite de France.
Shareholders, including scores of small French investors drawn to the stock market for the first time when France Telecom was privatized, now face the likely prospect of a costly capital increase to help the company raise fresh funding.
Camera-phone delay: Sony Ericsson’s flagship P800 camera-phone will only be on sale before Christmas rather than by the end of this month, company officials said, declining to explain why.
Sony Ericsson (SNE and ERICY) was to start selling the P800 phone – a combination of a PDA, a digital camera and a phone – in the third quarter.
Sickle cell exclusive: Biotech company SuperGen (SUPG) said its experimental treatment for sickle cell anemia could receive up to seven years of marketing exclusivity under a special designation granted by the U.S. Food and Drug Administration.
The drug, called Decitabine, was granted orphan drug status. This classification promotes development of drugs to treat rare diseases or conditions by protecting them from competition for certain periods from other medicines.