News Briefs

United proposes benefits cuts; former Freddie Mac CEO sues for withheld compensation; shareholders approve merger of J.P. Morgan Chase and Bank One; more.

  • UAL Corp.’s United Airlines filed a motion in U.S. bankruptcy court that proposed a cut in medical benefits for retirees. United believes the plan would reduce expenses by $145.4 million per year and save $57.1 million in cash annually from 2004 to 2010. Current retirees — defined as those who retired before July 1, 2003 — would start to make premium contributions. Future retirees would pay even more, added the company.
  • Leland Brendsel, who was thrown out as Freddie Mac’s chief executive due to accounting problems, has sued the company’s federal regulator over $53.7 million in withheld compensation. He charged that the Office of Federal Housing Enterprise Oversight, or OFHEO, overstepped its enforcement powers when it ordered the mortgage giant to freeze assets of Brendsel and two other executives last June, according to the Associated Press. The matter has grown rather urgent, noted the AP, since about $4 million of the compensation is in stock options that expire June 2. Another $12.3 million in options expire in July 2005.
  • In separate votes, shareholders of J.P. Morgan Chase and Co. and Bank One Corp. approved their merger, which the banks had announced in January. The merged company, which will keep the J.P. Morgan Chase name and its New York headquarters, will have $1.12 trillion in assets, second only to Citigroup.

Regulators must still approve the merger, reported the Associated Press, which added that the two banks expect the deal to go through by mid-year.

  • The Federal Home Loan Banks sold $3 billion of 10-year global notes. They were priced to yield 5.328 percent, or 61 basis points over comparable Treasurys.

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