(Advertisement)

Business news in brief

Posted: April 6, 2011 at 2:48 a.m.

QUOTE OF THE DAY

“Our businesses are performing strongly

in the United States, where industrial production growth is expected

to approach nearly 5 percent in 2011, outpacing GDP and supporting overall transportation volumes.”

Fred Smith,

chief executive officer of FedEx, in a teleconference Article, 1D

Verizon settles whistle-blower suit

WASHINGTON - Verizon Communications Inc. has paid $93.5 million to settle allegations that it overcharged the federal government, the Justice Department said Tuesday.

The lawsuit was filed by Stephen Shea, a “whistle blower,” in 2007 and alleged overbilling as far back as 1999, first by MCI Communications and later by Verizon, which bought MCI in 2006.

The lawsuit alleged that Verizon had billed the government for “tax-like” surcharges that it wasn’t entitled to impose on the government, according to the law firm representing Shea, Phillips & Cohen LLP.

“This settlement concludes efforts by both parties to resolve this dispute amicably, without further litigation,” said Verizon spokesman Peter Lucht.

The lawsuit had been under seal, meaning it wasn’t publicly known, until it was revealed as settled on Tuesday.

BP seeks new formula for spill fine

BP Plc said the U.S. should calculate its pollution fine for last year’s Gulf of Mexico oil spill based on how long the damaged well gushed, not on how many barrels of crude it discharged.

The Obama administration in December sued BP and other companies involved in the worst offshore oil spill in U.S. history, seeking a civil penalty based on the more than 4.1 million barrels of oil it said spilled into the gulf after the Deepwater Horizon rig blew up off the Louisiana coast in April 2010, killing 11 people. The gusher was capped July 15 and permanently sealed Sept. 19.

BP said in a filing in federal court in New Orleans that the government should assess a fine based on the days the well was in violation of the Clean Water Act, an alternative method to the way the U.S. said it plans to calculate the penalty. The difference amounts to billions of dollars.

In its complaint, the U.S. said it will seek civil penalties of $1,000 for each barrel of oil spilled, or in the case of negligence or willful misconduct, as much as $4,300 a barrel. London-based BP has denied acting in a way that would trigger the higher per-barrel fine. The company didn’t specify what the penalty would be under its calculation.

The Clean Water Act provides a fine of $32,500 for each day of violation as an alternative to the per-barrel spill assessment, said David Uhlmann, former head of the U.S. Justice Department’s environmental-crimes unit.

Diamond Foods to buy Pringles

NEW YORK - Diamond Foods Inc. is buying Procter & Gamble Co.’s Pringles chips business in a $1.5 billion deal, the biggest in a string that has given the maker of Pop Secret popcorn and Kettle chips a growing share of the snack aisle.

The deal also completes Procter & Gamble’s exit from all its major food businesses. The maker of Tide and Pampers has sold off Folgers coffee, Jif peanut butter, Crisco Shortening and Sunny Delight drinks in recent years.

The Pringles deal is structured to create a new company under the Diamond Foods name.

Procter & Gamble shareholders will get about 57 percent of the combined company, while Diamond shareholders will own about 43 percent.

Diamond, founded in 1912 by a group of California walnut growers, was known for nuts in shells for most of its history. But since Diamond went public in 2005, an acquisition binge has broadened its array of snacks. It bought Pop Secret in 2008 and Kettle last year.

The Pringles transaction will dwarf those deals, more than tripling Diamond’s revenue to about $2.4 billion a year.

Pringles would become the third billion-dollar brand to be sold off by Procter & Gamble in recent years, after Folgers and Actonel. It leaves Procter & Gamble with 23 brands with $1 billion in annual sales or more.

Diamond’s stock jumped $3.84, or 6.7 percent, to close at $61.06.

The deal, which still needs Diamond stockholder approval, is expected to close by the end of the year.

Proposal slows exports for tests

U.S. meat packers would be forced to hold back from shipping beef, pork and poultry until government inspectors complete tests on the products, under a proposal released Tuesday by the Department of Agriculture.

The “test-and-hold” practice is already followed by some of the nation’s largest meat processors including Tyson Foods Inc. and Cargill Inc., Agriculture Secretary Tom Vilsack said as he announced the plan in a conference call with reporters. Holding back shipments for 24 to 48 hours until test results are in will prevent recalls and serious illnesses, he said.

“Test-and-hold is one more example of how to work with the industry and consumer groups to improve public health,” Vilsack said.

Vilsack said mandatory delays might have prevented 44 recalls from 2007 to 2009. The Agriculture Department inspects meat, eggs and poultry, while the U.S. Food and Drug Administration is responsible for other products that account for about 80 percent of the U.S. food supply.

The new rule will be published in the Federal Register and take effect, with any appropriate changes, after a 90-day comment period, the Agriculture Department said.

NLR’s Splash to construct gas domes

Splash SuperPools LLC, a North Little Rock-based pool manufacturing company, has partnered with Ecomembrane SRL of Italy to produce bio-gas domes and gas holders in the United States, according to a release Tuesday.

The partnership called Ecomembrane U.S. will manufacture domes and holders for waste management plants, sewage facilities and food processing plants, said Bill Shroyer, president of Splash and product manger for Ecomembrane U.S. The domes and holders are used to harvest methane gas.

Ecomembrane U.S. products will be made in the Splash manufacturing plant. Splash has 18 employees who are contracted by Ecomembrane U.S., Shroyer said. He also said the company hopes to add more jobs based on the demand for the products.

Business, Pages 28 on 04/06/2011

(Advertisement)



« Previous Story

MARKET REPORT: Stocks mixed after Fed minutes

A quiet day on Wall Street left stock indexes little changed after minutes from the most recent meeting of the Federal Reserve’s policy committee showed few signs that the ... Read »

Next Story »

NEWS IN BRIEF

VCC founder leaves LR construction firm Gus Vratsinas, 66, co-founder and chairman of Little Rock construction company VCC, has retired after 24 years with the company, the... Read »