Pettibone revamp gets court's OK

Chicago-based Pettibone Corp. said Monday that a U.S. BankruptcyCourt has approved Pettibone's reorganization plan, paving the wayfor the material handling company's emergence from Chapter 11bankruptcy before the end of the year. The Bankruptcy Court gave thego-ahead to a plan in which Addison businessman Michael Heisley willbecome Pettibone's largest stockholder because he has been able toarrange $40 million in new financing for Pettibone. Heisley headsHeico Inc., a material services holding company that reported revenueof $80 million and a net income in excess of $5 million in 1987.Also, the agreement calls for 14 private lenders to receiveapproximately $40 million in cash and preferred stock to satisfytheir secured claims. Pettibone filed for bankruptcy in 1986. In1988, the company reported a net income of $6.7 million on revenue of$109.7 million.

120 CHURCH'S TO CLOSE: San Antonio, Texas-based Church's FriedChicken, trying to fend off a takeover from Popeyes Famous FriedChicken and Biscuits, said Monday it will close 120 money-losingrestaurants - including a dozen in Illinois - and write off about $27million because of the closings. Popeyes has offered $8 a share, or$290 million, to acquire Church's. Its offer expires Friday.Church's has argued that former executives now at Popeyes usedconfidential information to form their bid. Church's, thesecond-biggest chicken restaurant, now has about 1,500 restaurants.Popeyes, third-largest, has about 725.

SEARLE GAINS DRUG RIGHTS: G.D. Searle & Co. has acquired U.S.marketing rights for an anti-arthritis drug that it hopes to use inconnection with its proprietary Cytotec that treats and possiblyprevents ulcers caused by many arthritis medications. Bothoxaprozin, the drug Searle will market under the new agreement withWyeth-Ayerst Laboratories of Philadelphia, and Cytotec must still beapproved by the Food and Drug Administration. Oxaprozin would bemarketed as a once-daily medication. Searle said it would marketoxaprozin with Cytotec and possibly combine the two into a singlemedication.

HOME COMPLETIONS DIP: Completions of new homes in the nationslipped 2.3 percent in October to a seasonally adjusted annual rateof 1.51 million units, the Commerce Department said Monday.Completions were virtually unchanged in September at a 1.54 millionunit annual rate, the department said. Compared with October, 1987,the number of houses completed in October was down 3.8 percent, itsaid. Completions of single-family homes fell 1.5 percent in Octoberto a 1.08 million-unit annual rate after rising 2.0 percent inSeptember, while completions of multifamily buildings fell 4.3percent to a 428,000-unit rate after a 4.1 percent September drop.

AIR FARES CUT: Major U.S. airlines said Monday they would cutfares used by business travelers by an average of 15 percent, partlyreversing increases announced just last month that had been heraldedas the end of the industry's vicious fare wars. American,Continental and Northwest airlines all said they would match discountfares initiated Saturday by Chicago-based United Airlines, thebiggest U.S. carrier. The fares require purchase seven days inadvance, carry a 25 percent cancellation fee and are available forone-way travel, which should make them popular with business people.

LBO HEARINGS: The Senate Finance Committee on Monday announcedthree days of hearings on leveraged buyouts and the general increasein corporate debt. "The massive corporate conversion of equity todebt causes me concern about the ability of our country'scorporations to weather an economic downturn," Sen. Lloyd Bentsen(D-Texas), the committee chairman, said in announcing the hearingsfor Jan. 24, 25 and 26. "I am also concerned about the possibleadverse effects of this mounting debt on federal tax revenues, at atime when reducing the budget deficit is a critical priority,"Bentsen said.

INTEREST RATES FALL: Interest rates on short-term Treasurysecurities fell in Monday's auction. The Treasury Department sold$7.2 billion in three-month bills at an average discount rate of 7.98percent, down from 8.04 percent last week. Another $7.2 billion wassold in six-month bills at an average discount rate of 8.21 percent,down from 8.25 percent last week. The new discount rates understatethe actual return to investors - 8.26 percent for three-month bills,with a $10,000 bill selling for $9,798.30, and and 8.69 percent forsix-month bills selling for $9,584.90. In a separate report, theFederal Reserve said that the average yield for one-year Treasurybills, the most popular index for making changes in adjustable ratehome mortgages, rose to 8.89 percent last week after averaging 8.75percent the week before.