Witness backs firing Ovitz
Georgetown, Del. Walt Disney Co. had “a lot of good reasons” to fire Michael Ovitz from his job as president, but none of the reasons were good enough to justify a for-cause firing, an expert for the company’s board of directors testified Friday.
California employment lawyer John Fox is expected to be one of the last witnesses in the trial of a shareholder lawsuit challenging Disney’s 1996 decision to terminate Ovitz with a $140 million severance package after 14 months as president.
Shareholders say Disney’s board was lax in reviewing Ovitz’s employment contract and in failing to fire him for cause due to alleged dishonesty and insubordination to Disney Chief Executive Michael Eisner, the longtime friend who recruited him.
Disney’s review of the decisions to hire and fire Ovitz was so flawed that the company lost the chance to avoid paying the $140 million severance, shareholder attorney Steven Schulman said Friday.
Cigarette makers raise wholesale prices
New York Cigarette makers raised their prices this week, in the latest indication that conditions have stabilized in the U.S. market.
Altria Group Inc.’s Philip Morris USA unit Thursday raised wholesale list prices on a number of its smaller brands, according to spokeswoman Peggy Roberts.
The changes don’t affect Marlboro, the leading U.S. cigarette brand.
Wholesale prices for Alpine, Benson & Hedges, Chesterfield, and a number of Philip Morris USA’s other smaller brands will climb by $1 a carton, effective Jan. 16, she said.
The brands affected represent roughly 4 percent of Altria’s U.S. tobacco business, according to analyst Bonnie Herzog.
Philip Morris, of Richmond, Va., also extended last month’s reduction in promotional discounts through Feb. 27, she said.
W.R. Grace files amended bankruptcy
W.R. Grace & Co. has filed an amended bankruptcy reorganization plan, according to a Friday filing with the Securities and Exchange Commission.
According to the filing, the unsecured creditors committee and the official committee of shareholders have agreed to support the amended plan.
The Columbia, Md., chemical company said its amended plan addresses many of the objections raised by creditors and other interested parties to an earlier plan it filed Nov. 13.
The committees representing asbestos claimants don’t support the amended plan, according to the filing.
A hearing to consider approval of the amended disclosure statement is scheduled for next Friday in U.S. Bankruptcy Court in Wilmington, Del.
W.R. Grace filed for Chapter 11 bankruptcy protection in April 2001 to resolve asbestos claims.
W.R. Grace’s shares rose 5 cents to $13.20 in midday trading on the New York Stock Exchange.
GM to sell Lansing engine plant
Detroit General Motors Corp., the world’s biggest automaker, is selling an idled suburban Lansing engine plant to a commercial property buyout firm for an undisclosed price.
Ashley Capital LLC, based in New York, will renovate the plant and lease it to a supply division of Ryder System Inc., which will support GM’s other Lansing-area factories.
The 1.2 million square-foot engine factory closed in 2001 after 20 years of production.
“The sale of this surplus property will put a prime piece of real estate in Delta Township to productive use,” Matt Cullen, GM’s general manager for economic development and enterprise services, said in a statement. “We feel it is important for the communities in which we do business to be successful, and this project will benefit the community while supporting GM’s Lansing-area production facilities.”
Miami-based Ryder expects to begin operations at the property in the second half of this year.
GM shares fell 11 cents to $37.21 in midday trading on New York Stock Exchange, while Ryder shares rose 45 cents to $46.