TOP 10 STORIES / April 2-6

1 PG&E; Files for Bankruptcy: The state’s largest utility, Pacific Gas & Electric, filed for Chapter 11 bankruptcy protection Friday despite months of efforts by state officials to bail out the cash-starved company. The 13 million people served by the San Francisco-based utility probably will be among the least affected, because bankruptcy proceedings allow companies to protect their assets from creditors and continue operating while they try to dig out of their financial problems. But lenders, bondholders and power generators may have to write off billions of dollars advanced to the utility as losses. That prospect fueled a sell-off in those stocks, as investors worry that the companies’ earnings could be hurt by the reorganization and that Southern California Edison might take the same route. (A Times Staff Writer)

*

2 Job Losses Adding Up: Corporate layoff announcements began taking their toll on the U.S. economy in March, nudging the nation’s unemployment rate up to 4.3% and producing the largest one-month loss of jobs--86,000--in almost a decade. Until the March data, some had speculated there might be more sizzle than steak to the layoff news and said the country might dodge a painful contraction in employment. But March’s uptick in unemployment spells new trouble for an economy that already depends on consumers’ continuing to buy big-ticket items, something they probably will not do without jobs. Regardless, the jobless rate remains low by historical standards. (A Times Staff Writer)

*

3 Southland Seen Dodging Recession: The national economy is almost certain to fall into recession this year or early next year, but Southern California largely will be spared, UCLA analysts predicted. The university’s business forecasters, who in recent months have been among the nation’s gloomiest economic prognosticators, foresee a 90% chance of a U.S. recession. They said the downturn could hit the Bay Area hard, because it is so dependent on technology spending. But Southern California, the UCLA forecasters said, should slow only moderately and should recover quickly because it is less dependent on the slumping technology and manufacturing industries. (Stuart Silverstein)

*

4 Tech Issues Drive Market Lower: Warnings of earnings shortfalls and massive layoffs sent tech stocks tumbling last week, driving the Nasdaq composite index to a 29-month low Wednesday. After the carnage, the Nasdaq had plummeted to 1,638.80, down 68% from its March 2000 peak of 5,048.62. The sell-off was prompted by gloomy forecasts from electronic commerce giant Ariba, Internet content delivery firm Inktomi, network testing equipment maker Agilent Technologies, phone equipment maker Tellabs and more than a dozen other tech firms. The sector rallied nearly 9% on Thursday after positive earnings news from PC maker Dell Computer, but dipped again Friday, ending the week at 1,720.39, down 6.5%. The Dow Jones industrial average soared more than 400 points Thursday for its second-best daily point gain after positive earnings news from aluminum giant Alcoa. The Dow ended the week down 90 points, or 0.9%, at 9,791. (Karen Kaplan)

*

5 Auto Sales Slide in 1st Quarter: U.S. car and truck sales continued to decline during the first quarter, but economists and industry executives are buoyed by the fact that the numbers were better than they had feared. Last year was the best on record, especially the strong first quarter, and the 5.8% decline over the last three months was less than expected. The bad news: Auto makers, especially the American firms, are resorting more than ever to generous loans, discounts and rebates to sell their vehicles, taking big chunks of profit out of high-margin truck and sport-utility vehicle sales. (Terril Yue Jones)

*

6 Fowl Deal Afoot: The state’s largest poultry producer, Foster Farms, has agreed to purchase the chicken business of its biggest rival, El Monte-based Zacky Farms, for an undisclosed amount. Zacky would remain in the turkey business, keeping its ranches and meat processing plants in Fresno and Stockton and its headquarters in Los Angeles County. The transaction is expected to be closely scrutinized by antitrust regulators, however. The deal would be the latest in a string of mergers in the meat packing industry, a trend analysts fear could lead to higher prices for consumers. (Melinda Fulmer)

*

7 Digital Music Gets a Hearing: Lawmakers criticized the recording industry for dragging its feet in offering to sell digital music on the Internet, but stopped short of calling for new laws that would force music labels to step up their efforts. At a Senate Judiciary Committee hearing, executives of Napster--which is struggling to comply with a court order to halt the file-swapping of copyrighted music on its service--said Congress should force the major music labels to license their material to Napster and companies like it. But senators seemed satisfied by the promises of recording-industry executives, who vowed to begin offering digital downloads of popular music by the end of the year. On the eve of the hearing, three major labels--AOL Time Warner, EMI and Bertelsmann--said they have formed a joint venture with RealNetworks to license and sell their music online. The venture, dubbed MusicNet, will compete with a similar service proposed by Universal Music Group and Sony Music Entertainment, called Duet. Universal and Sony also announced a plan to sell music through online portal Yahoo. (Edmund Sanders)

*

8 Mexico Reform Plan Debated: Mexican President Vicente Fox proposed sweeping fiscal reforms to raise up to $20 billion in additional annual tax revenue--one-third more than Mexico now collects, excluding the government’s take from oil sales. Fox said the reforms are critical to carrying out his plan to modernize the government and fund social projects. Although a broad spectrum of politicians and economists agree reforms are needed, the plan drew immediate heat for a provision that would extend the 15% value-added tax to food. Critics say the feature would unduly punish the poor, for whom food and drug purchases account for 50% of household income. Fox’s assurances that the food tax would be refunded to the 5 million poorest families did not persuade skeptics. The Fox plan, which will be debated over the next several months, also contains provisions to modernize Mexico’s financial institutions and generate more loans for its credit-starved economy. (Chris Kraul)

*

9 ICN Executives Won’t Be Indicted: ICN Pharmaceuticals Inc. said a federal grand jury has decided against indicting Chairman Milan Panic and other executives over claims they misled investors. The Costa Mesa drug maker, however, said it could be indicted itself on charges stemming from its four-month delay six years ago in reporting that its prize drug had failed to win government approval. ICN said it is discussing a plea bargain to settle the case. It also set aside $9.25 million to settle both the criminal investigation and a pending Securities and Exchange Commission lawsuit. Meanwhile, dissident shareholders, unhappy over the pace of a plan to split the company into three independent units, said Tuesday they plan to nominate a slate of three directors for the 14-member board at the annual shareholder meeting, expected to be held in May. (Marc Ballon)

*

10 Film Roman Rejects Pentamedia Offer: A deal by India’s largest multimedia software company, Pentamedia Graphics, to acquire the majority of animation studio Film Roman hit a snag. The 17-year-old North Hollywood boutique studio animates “The Simpsons” and “King of the Hill” for Fox Television and “The Oblongs” for Warner Bros. Film Roman’s board rejected the terms of a newly structured $15-million deal proposed by Pentamedia that would give the Indian concern a 60% stake. The board extended the closing date to Friday. Film Roman has been ailing financially for years and lost $2.6 million last year. Pentamedia, which employs more than 800 animators at its 22-acre headquarters in Chennai, India, says that under the proposed deal, existing shows would continue to be animated by Film Roman’s contractors, but that special effects and animation for new ventures would be done in India. (Meg James)

*

* These and additional stories from last week are available at https://www.latimes.com/business, divided by category. Click on “Money and Investing,” “Entertainment Business” and other topics.

*

* Please see Monday’s Business section for a preview of the week’s events.