Kmart under FBI scrutiny

        The FBI is reviewing Kmart Corp. documents as part of an investigation into possible criminal violations at the bankrupt company. The Securities and Exchange Commission also is looking into Kmart's accounting.

        “Kmart is cooperating fully with the FBI,” said a Kmart spokesman.

        The SEC is under pressure to investigate criminal wrongdoing in bankruptcy cases in the wake of Enron Corp.'s collapse, said Jerry Reisman, a corporate fraud expert in New Jersey.
       

Tyco has payoff plan

        Tyco International Ltd. plans to pay off about $10 billion of its $27 billion in debt after it spins off its lending division, and said Thursday it's on course to do so by the end of June.

        The figure includes the $7.2 billion Tyco hopes to generate from its CIT unit through an initial public stock offering, or whatever the division would fetch through a sale. Tyco would pay off the balance of the $10 billion with cash. A worst-case scenario would require the conglomerate to refinance $3.25 billion in debt in February, chief financial officer Mark Swartz said.
       

Dillard's improves

        Dillard's Inc. said first-quarter profit doubled as the department-store chain cut costs, sold more private-label items and benefited from an accounting change. Net income in the period ended May 4 rose to $58 million, or 68 cents a share, with the change in an accounting rule boosting results by $3.9 million, the company said. Dillard's said the quarter's results may be restated once the new accounting is fully in place.

        Profit increased as Dillard's trimmed advertising, selling, general and administrative expenses by $22 million.
       

Adelphia CFO quits

        Adelphia Communications Corp.'s chief financial officer, Timothy Rigas, quit as the cable-television company, under a federal accounting probe, tries to avoid a Nasdaq delisting and a debt payment it might not make.

        The shake-up follows new allegations that Adelphia may have funded a golf course built by the Rigases and inflated subscriber numbers, the Wall Street Journal reported. Mr. Rigas will retain his board seat, the company said. His father, John, quit as chief executive officer Wednesday.

        Adelphia has a Nasdaq hearing today about the possible delisting, triggered by the company's failure to file its annual report.
       

Pickers want more

        Florida tomato pickers pressured Taco Bell's parent company for higher prices Thursday. They want the Mexican-food subsidiary of Tricon Global Restaurants, based in Louisville, to pay an extra penny per pound for tomatoes.

        Taco Bell is the object of a boycott campaign by the Coalition of Immokalee Workers. Tricon chief executive David Novak, at the annual shareholders' meeting, politely responded that “we hear you” but insisted the dispute was between farm workers and growers.

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