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NATION
WorldCom directors to pay $20 million in final settlement

A landmark agreement by former WorldCom directors to pay millions of dollars of their own money to settle with investors was revived yesterday, about six weeks after it was scuttled by objections from other defendants in the case.

Under the terms of the settlement reached yesterday evening, 11 former WorldCom directors will pay $20 million out of their own pockets to settle with Alan G. Hevesi, comptroller of New York and trustee of the state's Common Retirement Fund. Hevesi is lead plaintiff in the civil suit representing hundreds of thousands of investors who held WorldCom stock and bonds in the years immediately before its bankruptcy filing in 2002.

If the settlement is approved by the court, it will bring to $6.06 billion the total amount recovered from defendants by Hevesi in the case.

The initial deal between the directors and Hevesi was announced in January and was viewed as a rare case of investors holding directors accountable for problems occurring on their watch. But the agreement fell apart in early February when the judge overseeing the case ruled that an aspect of the deal was illegal because it would have limited the directors' potential liability and exposed other defendants in the case to larger damages.

Continental to lose more money

Continental Airlines Inc., the fifth-largest U.S. carrier, said a 38 percent rise in first-quarter fuel prices and falling U.S. air fares will drive the company's "significant" loss this year.

The company estimated in a Securities and Exchange Commission filing yesterday that it will pay an average $1.44 a gallon for jet fuel in the first quarter, up from $1.04 a year earlier. Average ticket prices for U.S. flights will probably be down as much as 6 percent, it said. Continental on March 4 said it expected to lose hundreds of millions of dollars this year.

The airline, like other major U.S. carriers, is seeking to reduce costs to stem losses while countering shrinking fares and higher prices for jet fuel, the industry's second biggest expense behind labor. The company, based in Houston, sought $500 million in concessions from workers and expects results of union votes on new contracts by the end of this month.

Citigroup barred from acquisitions

WASHINGTON » The Federal Reserve has barred Citigroup Inc., the largest U.S. financial institution, from making major new acquisitions until it corrects regulatory problems that have gotten it into trouble in several countries.

The unusual move by the central bank came less than a month after Citigroup, stung by a series of scandals in the United States and abroad, put into effect a new ethics policy and a drive to strengthen internal controls and expand training throughout the globe-spanning company.

HAWAII
PUC to consider rate hike by itself

The state Public Utilities Commission has issued an order that separates Hawaiian Electric Co.'s request for a 7.3 percent rate increase from the company's request for approval of energy-efficiency programs.

The demand-side management programs have been moved into a new energy efficiency docket.