Business briefs for November 20, 2001

Tuesday, Nov. 20, 2001 | 9:43 a.m.

Former IRS lawyer convicted in Vegas

One day after returning a guilty verdict against an IRS attorney accused of securities fraud, a jury was to return to U.S. District Court today to decide if assets he controls should be seized by the federal government.

The jury Monday found Max Tanner guilty on nearly 40 counts including mail fraud, securities fraud, wire fraud, money laundering, false income tax return filings and tax evasion.

As a result, attorneys for the U.S. Department of Justice will try to convince jurors today that $1.1 million of Tanner's money, his cars and a boat were purchased with ill-gotten gains and should be seized.

The jury also convicted Dennis Evans of conspiracy in connection with the scheme.

An indictment in September 2000 said Tanner and Evans, a stock promoter, defrauded investors by distributing false information about two companies, Maid Aide, a residential cleaning service, and a trucking company, CFE Trucking Co. of Tampa, Fla.

Brokers and cold callers were also paid kickbacks to promote the stock of Maid Aide, the government alleged.

The defendants generated substantial illegal profits, which they disbursed among themselves, the indictment said.

Tanner and Evans are to be sentenced in March.

New suitor could derail merger

HOUSTON -- A day after Conoco and Phillips Petroleum announced plans to merge, creating an oil company with a market value of $35 billion, the stock markets were abuzz Monday with speculation that another suitor might emerge to woo Conoco, the fourth-largest oil company in the United States.

Conoco closed at $25.98 on Monday, up $1.68, or 6.9 percent, stoked by investors' conviction that several larger oil concerns might also be interested in acquiring the company. (Phillips stock also rose, up $1.53, to 53.5.) And a counteroffer might well present less of an antitrust problem than the Phillips deal.

At Monday's stock price, Conoco was worth more than it would be under the merger, suggesting that investors thought a higher offer was coming.

"Conoco taking no premium for this deal is like throwing blood in the water: it will raise the sharks," said Frederick P. Leuffer, a senior oil analyst with Bear, Stearns.

Analysts said possible contenders might include the TotalFinaElf of France, BP, Royal Dutch/Shell and ChevronTexaco.

Fast food operator buying burrito chain

SANTA BARBARA, Calif. -- CKE Restaurant Group Inc., parent of the Carl's Jr. and Hardee's chains, plans to merge with the Santa Barbara Restaurant Group in a deal worth about $52 million.

The terms of the merger announced Monday call for each share of Santa Barbara Restaurant Group stock to be converted into 0.5 shares of CKE common stock. Shares of Santa Barbara Restaurant Group soared $1.17 Monday to close at $3.52.

CKE stock also closed higher Monday, up 16 cents to $8.01.

Carl's Jr. is the largest franchisee of the Green Burrito chain, operating 107 "dual-concept" restaurants which house both a Carl's Jr. and a Green Burrito. If the merger is completed, Santa Barbara Restaurant Group will become a CKE subsidiary and CKE will take over direct ownership of the Green Burrito chain.

Debt problems may threaten deal

HOUSTON -- Enron Corp. shares and bonds fell on concern that the energy trader may not be able to make debt payments over the next year, threatening its plan to merge with Dynegy Inc.

Shares of Enron fell $1.04 to $8.02 in midmorning trading today.

Enron has $9.15 billion in debt payments due by the end of 2002, and less than $2 billion in cash or credit lines it can tap, according to a filing Monday with the Securities & Exchange Commission.

"This filing shows that Enron is in a precarious financial situation," said Commerzbank Securities analyst Andre Meade.