Citigroup to settle WorldCom allegations

Financial services giant Citigroup has agreed to pay $2.65 billion to settle class-action lawsuits by investors who bought WorldCom Inc. securities before the telecommunications company’s bankruptcy filing in 2002.

It was the second biggest securities litigation deal after a $3.2 billion settlement by services giant Cendant Corp. in 2000, according to New York state Comptroller Alan G. Hevesi. Citigroup’s brokerage division was a key backer of WorldCom securities before WorldCom filed for the biggest bankruptcy in history in July 2002 amid accounting irregularities.

Hevesi said other defendants in the class-action suits, including J.P. Morgan Securities and Bank of America Securities, had been given 45 days to match the Citigroup deal. If they agree to similar settlements, that could give WorldCom investors access to another $2.8 billion, Hevesi said.

Telecommunications

MCI to slash 7,500 jobs

MCI plans to eliminate 7,500 jobs this year — about 15 percent of its work force — to cut costs as it struggles with weak revenues that resulted in a quarterly loss of $388 million, the company said Monday.

The firm’s release of quarterly earnings was the first for the company since it emerged last month from nearly two years of bankruptcy protection and changed its name from WorldCom.

The $388 million loss compared to a net profit of $52 million in the year-ago quarter. The company said the weaker performance stemmed from intense price competition in the industry that has crimped revenues.

Agriculture

Biotech wheat project stopped by Monsanto

Monsanto Co. said Monday it had halted development of genetically-engineered wheat, a decision hailed by opponents of biotech crops.

The biotech wheat would have been — like corn, cotton and oilseeds produced by Monsanto — able to withstand Monsanto’s Roundup herbicide.

Monsanto cited economic factors in its decision: a 25 percent decrease in U.S. and Canadian spring wheat acreage since 1997, and a lack of “widespread industry alignment” behind biotech wheat.

Genetically-engineered crops remain a difficult sale in parts of the world. Opponents have questioned the safety of the crops.

Aviation

Delta raises possibility of bankruptcy filing

Delta Air Lines said Monday it might have to file for bankruptcy if it doesn’t get significant wage cuts from pilots, the first time the struggling carrier has publicly linked the two issues in a regulatory filing.

The Atlanta-based company has said repeatedly that it would fight to avoid bankruptcy and has been cautious in the words it uses when discussing the possibility. Asked about it at Delta’s annual shareholder meeting last month, chief executive Gerald Grinstein said only that bankruptcy would be undesirable.

But in a quarterly report with the Securities and Exchange Commission on Monday, Delta said in part: “If we cannot achieve a competitive cost structure, regain sustained profitability and access the capital markets on acceptable terms, we will need to pursue alternative courses of action … including the possibility of seeking to restructure our costs under Chapter 11.”