April 21, 2008 Issue Posted April 10, 2008, 10:10AM EST

News You Need to Know

Loaded for Bear

Bear Stearns (BSC) may be fading into history, but legal wrangling over the collapse of the firm's two big hedge funds last June goes on and on. The latest in a snarl of lawsuits: On Apr. 7 the liquidators for the two funds sued Bear, seeking $1 billion in damages. The civil suit alleges the firm "concealed the fact that these funds were never designed to withstand even a slight downtick in the housing market." Also named as a defendant is Deloitte & Touche, the auditor for the funds. Bear declines to comment; Deloitte says it "believes the suit to be totally without merit and will defend it vigorously."

—Edited by Harry Maurer & Cristina Linblad

AMD: The Chips Are Down

Advanced Micro Devices (AMD), once the little engine that could against Intel (INTC), startled investors on Apr. 7 when it warned that first-quarter sales were sputtering across its lineup, including server, PC, and graphics chips. The company signaled hard times ahead by saying it plans to chop 10% of its workforce, about 1,600 people. AMD has run into a string of product delays, steep costs from its purchase of graphics chipmaker ATI Technologies, and the soaring price of building fabrication plants.

See "AMD Warns of Low Sales and Job Cuts"

—Edited by Harry Maurer & Cristina Linblad

Birth of a Pipeline?

America needs natural gas, and BP (BP) and ConocoPhillips (COP) have a scheme to supply lots of it. The two said on Apr. 8 that they would lay out $600 million to study the feasibility of building a $30 billion gas pipeline from the North Slope in Alaska to Alberta and then, possibly, on to the Lower 48. The line could deliver 6% to 8% of U.S. gas needs and would be the largest private-sector construction project ever in North America.

—Edited by Harry Maurer & Cristina Linblad

Tech Titans Tangle

The seemingly endless war of nerves between Microsoft (MSFT) and Yahoo! (YHOO) is escalating. On Apr. 5, Microsoft sent a letter demanding that Yahoo's board seriously negotiate the software giant's $45 billion buyout offer, or Microsoft would launch a proxy fight in three weeks. Yahoo fired a letter back saying it's open to a deal but only if Microsoft ponies up more money. On Apr. 9, Yahoo prodded Microsoft further by announcing a test to run ads from Microsoft archrival Google (GOOG) alongside Yahoo search queries. Most analysts continue to think a takeover will get done at a slightly higher price.

See "Is Yahoo Right to Resist Microsoft?"

—Edited by Harry Maurer & Cristina Linblad

A Quandary for Buffett

Warren Buffett may find himself in a difficult position: under pressure to let a valued executive go. The Wall Street Journal said on Apr. 7 that as part of discussions to end their investigation of Berkshire Hathaway's (BRK) General Re, federal prosecutors are seeking the ouster of CEO Joseph Brandon. The unit has operated under a cloud since the SEC started looking into a deal with insurer AIG (AIG) that the feds claim added $500 million to AIG earnings in 2000 and 2001. In February four former General Re officers were convicted of fraud, and prosecutors listed Brandon as an unindicted co-conspirator.

—Edited by Harry Maurer & Cristina Linblad

Booming Builders

Chinese construction companies gained valuable experience building Beijing's gleaming new national stadium, aquatics center, and other venues for this summer's Olympic Games. Now they are rapidly expanding overseas, reports BusinessWeek China in its April issue. Chinese outfits won international contracts worth $78 billion last year, up 18% from 2006. One standout project: Europe's tallest building, the 93-story Federation Tower in Moscow.

—Edited by Harry Maurer & Cristina Linblad

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