The Quadrangle

Issue date: 3/30/05 Section: News

OIL PLANT EXPLOSION FORCES EARLY GAS FUTURES HIGHER

On Thursday (March 24th, 2005) at 1:30 p.m. (2:30 p.m. ET), an oil refinery in Texas City, Texas exploded by an unknown accident that resulted in the death of 14 people while seriously injuring more than 70. However, Ross Pillari-the President of BP America-assured to FBI investigators that there was not any indication of terrorism or sabotage because explosions of this magnitude are not irregular, but that all possible resources would be directed in determining what actually happened and to review safety precautions in the future. The 14 people who unfortunately died in the plant accident were contract employees for J.E. Merritt, a division of Jacobs Engineering based in Los Angeles, California, refinery officials said. "I am here today to express BP's deep regret over yesterday's accident, and our thoughts and prayers are with the families of those who died and with those from the work force and the community who were injured," Pillari said in a news conference early Thursday.

The blast apparently happened in the refinery's isomerization unit, where the octane of gasoline was elevated, and according to BP spokesman Bill Stephens, "It took nearly two hours to extinguish the blaze." Moreever, according to John Bresland-a member of the U.S. Chemical Safety Board-, it was the country's 3rd largest refinery producing nearly 460,000 barrels of gasoline per day (3% of the U.S. supply), and the News of the accident spiked gasoline and oil futures higher in early trading Thursday. That means that the futures for the April contract for unleaded gasoline rose 2.66 cents to $1.6015 in early trading Thursday, while the May light crude contract gained 62 cents to $54.44 a barrel in electronic trading. The May contract for Brent crude rose 69 cents to $53.73.
Source: CNN


PROSECUTOR: BLAKE JURORS WERE INCREDIBLY STUPID

On Thursday (March 24th, 2005) in Los Angeles, California, District Attorney Steve Cooley says "Baretta" star Robert Blake was "guilty as sin" and the jurors who acquitted him last week of the 2001 slaying of his wife, Bonny Lee Bakley-who was shot in a car outside a restaurant where the couple had dined-, were "incredibly stupid." They acquitted Blake of one murder count as well as one count of solicitation of murder, but they gridlocked on a second solicitation count on a 11-1 vote in favor of a not-guilty verdict. Blake's attorney, though, M. Gerald Schwartzbach, said the DA's frivolous attack on the jurors was totally uncalled for, not to mention "small-minded." However, Juror Chuck Safko just plainly that "to hear him say we aren't a smart jury is sour grapes. They [the Prosecution] didn't have a good case. Their case was built around witnesses who weren't truthful."
Source: CNN


SHAREHOLDERS OK K-MART & SEARS MERGER

On Thursday (March 24th, 2005) at Hoffman Estates, Illinois, shareholders signed off on an unbelievable $12.3 billion merger of Kmart Holding Corp. and Sears, Roebuck and Co. thereby paving the way for the two struggling rivals to join forces to become the nation's third-largest retailer. The ratification of the contract came in back-to-back meetings at Sears' headquarters, and company officials said the deal could close later that Thursday. However, it was Kmart Chairman Edward Lampert who proposed the uniting of the longtime industry rivals just four months ago. Now, thanks in part to a last second bargaining plea, Sears' dwindling headquarters will now house a new retail titan named Sears Holdings' Corp. with nearly $55 billion in revenue, 3,800 stores, and a seemingly bright future.

Unfortunately, though, Sears' shares were not helped because they fell $6.06, or nearly 11 pecent, to $50.74 on the New York Stock Exchange, but Kmart's shares rose $1.19 to $126.02 on the Nasdaq. The deal overall will them the third-biggest retailer right behind Wal-Mart Stores, Inc. and Home Depot, Inc. In the process it would also unite the stores' top brands: Sears' Craftsman and Kenmore with Kmart's successful Martha Stewart and Joe Boxer product lines. Moreover, to Sears' benefit, it enhances their strategy of moving away from shopping malls to the more profitable off-mall sites that Kmart stores typically occupy.
Source: FoxNews.com

TAXPAYERS WHO USED 'SON OF BOSS' SHELTER PAY $3.2 BILLION

On Thursday (March 24th, 2005) in Washington D.C., the Internal Revenue Service (IRS) has regained nearly $3.2 billion in unpaid taxes from wealthy citizens who used the so-called "Son of Boss" tax shelter, the agency reported. There has been "some real pain" among the 1,165 taxpayers who are currently involved in a settlement, IRS Commissioner Mark Everson said at a news conference. He later commented that "some people have had to sell their villas and yachts" to come up with the money. The IRS had deemed the tax shelter fraulent and said last year it was indeed aware of estimated understatements of taxes due of more than $6 billion, excluding interest and penalties. It offered settlements with taxpayers that allowed them to deduct as a loss their out-of-pocket transaction costs.

On a brighter note, though, the commissioner commented that this project was nothing compared to prior efforts to capture tax evaders. For example, a program to crack down on the misguided use of offshore credit cards yielded nearly $270 million, which is equal to the amount paid by just three individuals in the "Son of Boss" initiative. One person even paid back more than $100 million and the average was nearly $1 million.
Source: USA Today wire reports

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