TOP STORIES -- Dec. 29-Jan. 3

SBC Gets OK to Offer

Long-Distance in State

SBC Communications Inc. realized a long-awaited goal of providing long-distance telephone service in California after the state Public Utilities Commission gave the company its final stamp of approval. Formerly known as Pacific Bell, SBC will compete against AT&T; Corp., WorldCom Inc.’s MCI unit and other long-distance carriers in addition to dominating the market for local calling in California.

SBC’s network covers 78% of the state, and the San Antonio company controls 90% of California’s residential access lines and 80% of its business lines. SBC has been fighting for the right to offer long-distance service in California’s $15-billion market since Congress passed sweeping deregulation laws in 1996 designed to spur competition in the telecom industry.

SBC rivals had urged regulators to deny SBC’s requests to enter the California long-distance market on the grounds that the company still held a monopoly in local service. But the PUC’s final approval was considered a foregone conclusion after the FCC’s ruling that the company had met the legal criteria to offer the service.

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Value of Bankruptcies

in ’02 Hits Record

A weak economy and widespread accounting irregularities conspired to fuel what by one measure has been the biggest year ever for corporate bankruptcies, with the value of 2002 filings soaring to a record $368 billion as of Dec. 25, according to BankruptcyData.com.

The number of public companies filing for Chapter 11 Bankruptcy Court protection was actually higher in 2001. But when measured by assets, the 2002 filings -- bloated by big names such as WorldCom Inc., Global Crossing Ltd., Kmart Corp., Conseco Inc., Adelphia Communications Inc. and UAL Corp. -- shattered last year’s record by 42%.

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Winnick Resigns

From Global Crossing

Gary Winnick resigned as chairman of Global Crossing Ltd., the telecommunications company he built from scratch into one of the brightest stars -- and most spectacular failures -- of the technology boom.

Once named the richest man in Los Angeles, Winnick was both hailed as a big charitable donor to zoo and library projects and reviled as a corporate scoundrel who cashed out at least $575 million in Global Crossing stock before the firm collapsed into bankruptcy proceedings.

Winnick’s resignation was expected as part of the company’s reorganization plan. He will return to his Beverly Hills investment banking firm, Pacific Capital Group.

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California Expands Area

of Poultry Quarantine

California officials ordered more than 1 million egg-producing hens destroyed and expanded a poultry quarantine after finding new cases of a fast-spreading and deadly avian virus in San Bernardino and San Diego counties.

The developments heightened concerns that exotic Newcastle disease, which recently surfaced at a Riverside County egg farm, was proliferating and could pose a threat to California’s $3-billion poultry industry.

Egg and poultry farms in Riverside County, the state’s No. 1 egg producer, have been under quarantine for the last several weeks, along with ranches in Los Angeles and San Bernardino counties. More than 100,000 commercial chickens already have been destroyed by agriculture officials.

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Top Ribapharm Execs

Threaten to Resign

Escalating the battle for control of Ribapharm Inc., the drug maker’s top management threatened to quit in protest over majority shareholder ICN Pharmaceuticals Inc.’s plan to fire most of Ribapharm’s board of directors.

Ribapharm said its chief executive, Dr. Johnson Y.N. Lau, along with Chief Financial Officer Thomas Stankovich and general counsel Roger Loomis, would resign unless ICN backs off its plan to remove five of Ribapharm’s six board members.

Ribapharm’s statement was the latest salvo in an unusual corporate battle between a company and a rebel spinoff firm. The conflict between the two Costa Mesa companies centers on the lucrative hepatitis C drug ribavirin, made by Ribapharm.

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Consumer Confidence

Drops in December

Consumer confidence slid in December, the sixth decline in the last seven months, increasing concerns that Americans might pull back on spending and weaken an already feeble economic recovery.

The Conference Board said its consumer confidence index fell in December to 80.3 from a revised 84.9 the month before. That was just above a nine-year low of 79.6 in October. Consumers in the Pacific region, including California, registered 75.7, down from 82.1 in November.

Further darkening economic prospects, a Gallup Poll found that more consumers plan to spend less over the next six months than those who plan to boost spending.

The downbeat reports come on the heels of a terrible holiday shopping season for retailers.

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Wal-Mart Stores Inc. and Federated Department Stores Inc. said post-Christmas sales weren’t strong enough to cushion the worst holiday shopping season in more than three decades. Wal-Mart said sales at stores open at least a year rose as little as 2%, at the low end of its forecast. Results for the November-December holiday period at Macy’s and Bloomingdale’s Cincinnati-based parent, Federated, will fall about 4.5%, a steeper decline than expected.

Discount retailer Target Corp. said same-store sales were above expectations during the week of Christmas but were not strong enough to offset disappointing December sales.

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Big Tobacco Absolved

in Death of Smoker

After being pummeled by West Coast juries in six straight cases, Big Tobacco won one when a federal judge in Oakland absolved Philip Morris Cos. and R.J. Reynolds Tobacco Co. of responsibility for the death of a longtime smoker.

The victory came in a directed verdict by U.S. District Judge Saundra B. Armstrong shortly before jury deliberations were to start in a case brought by the family of Frank R. White, who died at 81 after a lifetime of smoking.

In entering a judgment for the companies, Armstrong ruled that the jury had no basis to find them liable based on the evidence presented.

White, who began smoking at age 14, suffered from heart disease and chronic obstructive pulmonary disease at the time of his death in 1999.

Lawyers for White’s family blamed his death on the companies’ failure to design safer cigarettes and to provide adequate warnings of the risks of smoking.

But the suit had weaknesses, including the fact that White lived into his 80s and avoided lung cancer, the disease most clearly linked to tobacco, despite decades as a smoker.

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New Technology Would

Boost Digital Reception

Hoping to boost digital TV’s appeal, News Corp.’s Fox Group unit and Philips Research, an arm of Royal Philips Electronics, announced a technology they say would deliver perfect digital TV signals to more homes through indoor antennas.

The technology resulted from three years of research into digital TV reception in Los Angeles and three other major metropolitan areas. The companies’ study found no fundamental problems with the way stations broadcast digital TV; instead, the shortcomings were in digital TV receivers inside homes.

The work by Fox and Philips is the latest effort to improve indoor reception, one of several issues slowing the transition to digital TV. Such improvement is critical for viewers who use antennas but can’t have or don’t want one on their roof.

The study found that the biggest difficulty for digital receivers is distinguishing between the original broadcast and the echoes bouncing off buildings and hills.

19-Year-Old Arrested

in DirecTV Piracy Case

The FBI arrested a 19-year-old Los Angeles man on suspicion of stealing and posting on the Internet documents that might have allowed consumers to pirate broadcasts from DirecTV Inc., the nation’s largest satellite-TV provider.

Igor Serebryany came across the information while working with his uncle, who is employed by a document-copying service, according to court papers. The service was hired by the Los Angeles office of Jones, Day, Reavis & Pogue, one of the nation’s top law firms, which is representing DirecTV in a civil dispute against a vendor over the misappropriation of company secrets.

Serebryany, a student at the University of Chicago, was arrested at his parents’ Hollywood condominium and charged under the Economic Espionage Act of 1996, said Jim Spertus, an assistant U.S. attorney in Los Angeles. Serebryany is accused of stealing blueprints of DirecTV’s latest P4 access card technology, a credit-card-like device that prevents free access to digital television signals by the company’s 11 million subscribers. The technology cost DirecTV about $25 million to develop.

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Stock Market Rally

Rings In the New Year

Wall Street kicked off the new year with a big rally, giving investors a reason to cheer after enduring a third straight year of stock losses.

Thursday’s rally -- which saw the Dow Jones industrial average jump almost 266 points, its biggest first-trading-day-of-the-year gain since 1988 -- petered out Friday. But the Dow still rose 3.6% for the holiday-shortened week, while the technology-focused Nasdaq composite index notched a weekly gain of 2.9%.

The gains came at the end of a dismal year for Wall Street. The benchmark Standard & Poor’s 500 index fell 23.4% in 2002, giving the market its longest losing streak since 1939-41.

From Times Staff

For a preview of this week’s business news, please see Monday’s business section.