Business Desk
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
IN THE COURTS
BANKING COMPANIES SET TLE WORLDCOM SUIT
Frankfurt-based Deutsche Bank AG said yesterday that it has agreed to pay $325 million to settle claims in a class action suit brought after the collapse of WorldCom. The announcement came shortly after New York Comptroller Alan Hevesi announced that two other investment banking firms will pay $112.5 million to settle claims in the case. Mr. Hevesi is the court-appointed lead plaintiff in the case. The two banking firms are WestLB AG of Germany, which will pay $75 million, and Caboto Holding SIM S.p.A. of Italy, which will pay $37.5 million. Spokesmen for the firms didn’t immediately respond to requests for comment. WorldCom collapsed in a $11 billion accounting fraud in 2002. The case was brought by investors who purchased WorldCom securities in 2000 and 2001. Most of the banks and investment banks named in the case have settled, although JPMorgan Chase & Company of New York is among the holdouts.
– Associated Press
AIRLINES
DELTA WARNS OF BANKRUPTCY
Delta Air Lines said yesterday it expects to report a “substantial” loss this year and could seek bankruptcy protection if conditions worsen, news that sent the stock down 12%. In its annual report, the nation’s third-largest airline said it doesn’t expect to have enough cash coming in to cover leases, debt payments and other obligations, forcing it to tap available cash and the final $250 million it borrowed late last year from American Express Company. Delta – which reported a loss of $5.2 billion for 2004, the highest ever by a U.S. airline in a single year – didn’t specify how much it expects to fall short in 2005, saying only, “We believe that we will record a substantial net loss.”
– Associated Press
