Business & Finance
In a deal valued at $1.3 billion, Washington Mutual Inc. of Seattle will buy mortgage provider HomeSide Lending Inc. from its parent company, National Australia Bank (NAB), reports said. NAB will absorb a $57.5 million loss on the sale. It bought HomeSide in 1997, hoping to gain a foothold in the US market. But a series of reversals largely due to record refinancings in HomeSide's portfolio caused a $2.2 billion writeoff last year. Washington Mutual is the US's largest thrift. HomeSide is based in Jacksonville, Fla.
In bankruptcy-related news:
Enron put its 12 most valuable remaining assets up for sale in the clearest move yet toward liquidation. The bankrupt energy trader's interim management has made restructuring a goal, but said it will decide in December whether bids are high enough for such prized assets as its Portland (Ore.) General Electric utility and full or partial stakes in three natural gas pipelines. Enron investors and employees won their first settlement from a $25 billion lawsuit against the company's auditors. Andersen WorldWide SC, an international network of accounting partners, agreed to pay $40 million. Andersen's US unit, Arthur Andersen LLP, remains a defendant in the suit.
A federal bankruptcy court in Philadelphia barred Adelphia Communications Corp. founder John Rigas and members of his family from selling off real estate holdings until their ownership can be verified. The Rigases are accused of using Adelphia funds to buy and maintain properties that the management of the US's sixth-largest cable-TV operator claims the company may be entitled to.
Boeing's 25,000 unionized machinists vote today on whether to accept the aerospace giant's "best and final" contract offer or to strike. The current three-year contract expires Sunday at midnight. Union leaders are recommending a "no" vote. Pensions and job security are the main sticking points.
Financially troubled Nortel Networks must cut its payroll even more deeply than it hoped would be necessary, the Canadian maker of telecommunications equipment said. In announcing that third-quarter revenues would be 10 percent below those of the second quarter, a spokesman said the current workforce of 42,000 employees would drop to "approximately 35,000." At the start of last year, Nortel had almost 95,000 workers.