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Business news briefs — Oct. 2

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LEGAL

Billionaire guilty of tax fraud

H. Ty Warner, the billionaire creator of Beanie Babies plush toys, pleaded guilty to failing to pay taxes on money he hid from the U.S. in a Swiss bank account. Warner, who was charged with a single count of tax evasion last month, entered his plea before U.S. District Judge Charles P. Kocoras in Chicago.

“I am pleading guilty because I am guilty,” Warner, 69, told the judge, leaning close to a lectern microphone as his voice choked with emotion. Warner agreed to pay a civil penalty of almost $53.6 million. Tax evasion is punishable by as long as five years in prison. He also faces a fine of as much as $250,000. Sentencing is scheduled for Jan. 15.

Google reaches EU deal

Google is looking three times lucky. The tech giant escaped serious antitrust action in the United States early this year, and in April it dodged a hefty penalty in Europe.

The third piece of good fortune — from Google’s standpoint, at least — came Tuesday.

The European Union’s antitrust chief, Joaquín Almunia, announced that in his inquiry into Google’s search practices, he had tentatively reached a deal he could live with — one requiring Google to give higher visibility to competitors’ listings on Web search queries. After the company’s rivals comment on the settlement, Almunia said, he intends to have the final deal in place by next spring.

The European deal would go much further than a settlement early this year with the U.S. Federal Trade Commission, which required only minor concessions from Google. It would also allow Google to avoid a potential fine of up to $5 billion and a finding of wrongdoing that could limit its future activities.

WORKPLACE

Pilot fired after crash landing

Southwest Airlines Co. said it fired the captain who was at the controls of a plane that landed nose first at New York’s LaGuardia Airport in July, injuring nine people and snarling air traffic for hours. No identity was disclosed.

The captain, a Southwest pilot for 13 years, took control from the first officer just before the Boeing Co. 737 hit the runway, U.S. investigators said in August. Southwest ordered the first officer to undergo more training, the company said.

RESTRUCTURING

BlackBerry expenses mount

BlackBerry Ltd. expects to record about $400 million in restructuring charges, four times the amount it originally projected, as the company cuts its workforce by 40 percent and sells off equipment and real estate.

The expenses cover the cost of firing 4,500 workers, a move that will reduce BlackBerry’s staff to about 7,000 people, the Waterloo, Ontario-based company said. As part of its cost-cutting plan, BlackBerry plans to unload factories, manufacturing gear and property. Those assets will be listed separately on its balance sheet until they are sold, the company said.

BlackBerry, coping with plunging sales and mounting red ink, is streamlining the business as it seeks to seal a $4.7 billion buyout deal with its largest shareholder, Fairfax Financial Holdings Ltd.

ACQUISITIONS

Talent agency’s sale discussed

Forstmann Little & Co. attracted first-round bids for the talent agency IMG Worldwide Inc. from Silver Lake Management LLC, TPG Capital, CVC Capital Partners Ltd. and KKR & Co., Bloomberg News reported.

Potential buyers were to declare by Sept. 30 to get access to financial data on the company, which could fetch more than $2 billion. Forstmann Little bought IMG in 2004 for about $750 million, according to a person familiar with the matter.

The agency, now based in New York but formerly housed in Cleveland, was founded more than half a century ago with a handshake agreement between Mark McCormack and golfer Arnold Palmer, according to its website.

AUTO INDUSTRY

Tesla stock sinks after car fire

Shares of electric car company Tesla sank more than 6 percent Wednesday after an Internet video showed flames spewing from one of the company’s vehicles near Seattle. Shares of Tesla Motors Inc. fell $12.05 to $180.95 — the stock’s biggest one-day decline since July 16.

The driver stated that he believed he had struck some metal debris on the freeway, so he exited the highway and the vehicle became disabled. The automobile website Jalopnik.com posted photos of the blaze that it says were taken by a reader, along with a video. The video shows the front of the Tesla Model S in flames. Tesla said the fire was caused by “substantial damage” to the car when the driver hit a large metal object in the road.

Compiled from staff and wire reports


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