April 20, 2024

At Virgin America, a Fine Line Between Pizazz and Profit

There were more convenient flights later that morning, but Ms. Wolaner’s affection for Virgin’s service, as well as for the Wi-Fi, leather seats and even what she called the “adorable” animated safety video, prompted her to get up earlier than was ideal. This despite the fact that she once flew American Airlines so often that she is “platinum for life.”

She spoke wistfully of a night in 1987 when a blizzard pounded Albany, and American, rewarding her loyalty as a frequent flier, got her a seat on one of the last flights out. “I’ll never forget that night,” Ms. Wolaner said, as if reminiscing about an old friend. But in the years since, she felt that American’s service had declined, her elite status devalued.

“I’m a Virgin convert,” she said.

She’s not alone. Virgin works hard to convey an easy vibe — a flirty package of self-awareness and charisma bathed in purplish mood lighting that has earned glowing consumer reviews and challenged the idea that an airline can’t wow its passengers.

But if the airline has worked for consumers, it hasn’t worked for its investors. Since it started flying out of San Francisco in August 2007, Virgin has lost $675 million. Last November, foreseeing intensifying losses, the airline announced a sharp retrenchment, killing plans for 10 new airplanes each year and modestly cutting capacity on existing service. Already one of the smaller airlines — at 53 airplanes, it is not even a tenth the size of the big carriers — it seemed destined to remain boutique, if it survived at all.

History is not on Virgin’s side: since airline deregulation arrived in 1978, all but a handful of roughly 250 new airlines have failed.

Virgin’s combination of consumer popularity and lack of profitability raises a question: Can it make money and still be beloved? A few — like JetBlue and Southwest — have managed that. But the tried-and-true method of most United States carriers has been to cut back on customer service.

At Virgin, which recently celebrated its sixth anniversary, there’s a glimmer of progress for its investors, including Richard Branson, the founder and entrepreneur in chief of the Virgin Group, the investment company that owns 25 percent of Virgin America (which is distinct from Virgin Atlantic, the international carrier). Last month, Virgin America posted a profit of $8.8 million for the second quarter and forecast stronger results for the current quarter, reflecting typically heavy summer travel. But it also posted a loss of $37.5 million for the full first half of the year.

Still, it’s progress that the company’s chief executive, David Cush, said had come none too soon. Virgin has worked for its customers, he said, but now it has to work for investors, too.

“We’re 22 years old in the life of a human,” Mr. Cush said in a recent interview. “We’ve had a lot of fun in life, and now it’s time to join the real world.”

His ambitions are bold. He wants to take the airline public in 2014 or 2015. Such a move could well serve its major investors — including Mr. Branson’s Virgin Group and Cyrus Capital Partners, a hedge fund — who in May agreed to convert $290 million of the company’s $800 million in debt financing to an equity position. If the company goes public, they could cash in.

And yet, some industry analysts say a solid financial quarter hardly proves the company can go where few start-up airlines have gone before — into long-term profitability. “They’re nowhere near out of the woods yet,” said Henry Harteveldt, a veteran travel industry analyst. “If pizazz were profits, Virgin would be the most successful airline, but there are fundamentals.”

And there is another catch. Joining the real world means doing things that can frustrate travelers. For instance, Virgin is tweaking prices to try to bolster the number of passengers on each flight, which could make boarding and deplaning more frantic and risk delays. It is also trying to attract more business customers, which could create hierarchies that undercut the airline’s more democratic feel. And it is charging more than the industry average on some established routes.

The other airlines have responded by doing some of the things for which Virgin was a pioneer: upgrading airplanes with amenities like mood lighting, Wi-Fi and advanced in-seat entertainment. They, too, have made viral safety videos, including one from Delta that, among other things, featured a man politely declining to sit in the exit row.

At stake are travelers like Ms. Wolaner. She is infatuated with Virgin but is open to the idea that it may not last, having been let down by airlines before. On the Monday when she was traveling to Seattle, executives from Virgin were involved in two important meetings — one about a new safety video and another about ticket prices — very different sessions representing the cultural and financial sides of Virgin, both trying to help marry popularity and profit. It is a razor’s edge that few airlines have been able to navigate.

This article has been revised to reflect the following correction:

Correction: September 9, 2013

An earlier version of this article misspelled the surname of the editor in chief of Travel Leisure magazine. She is Nancy Novogrod, not Novograd.

Article source: http://www.nytimes.com/2013/09/08/business/at-virgin-america-a-fine-line-between-pizazz-and-profit.html?partner=rss&emc=rss

Nate Silver of FiveThirtyEight Blog Is to Join ESPN Staff

At ESPN, Mr. Silver is expected to have a wide-ranging portfolio. Along with his writing and number-crunching, he will most likely be a regular contributor to “Olbermann,” the late-night ESPN2 talk show hosted by Keith Olbermann that will have its debut at the end of August. In political years, he will also have a role at ABC News, which is owned by Disney.

An ESPN spokeswoman declined to comment on Friday night. Mr. Silver declined to comment. The employees, who spoke on the condition of anonymity, said that Mr. Silver’s deal could be announced as soon as Monday.

Before creating statistical models for elections, Mr. Silver was a baseball sabermetrician who built a highly effective system for projecting how players would perform in the future. For a time he was a managing partner of Baseball Prospectus.

At public events recently, he has expressed interest in covering sports more frequently, so the ESPN deal is a logical next step.

Mr. Silver’s three-year contract with The Times is set to expire in late August and his departure will most likely be interpreted as a blow to the company, which has promoted Mr. Silver and his brand of poll-based projections.

He gained such prominence in 2012 that President Obama joked that Mr. Silver had accurately predicted which turkeys the president would pardon that Thanksgiving. “Nate Silver completely nailed it,” he said. “The guy’s amazing.”

Speculation about the future of Mr. Silver and FiveThirtyEight heated up shortly after last November’s election, and he was wooed by no small number of other news organizations. Jill Abramson, the newspaper’s executive editor, and Mark Thompson, the chief executive of The New York Times Company, said earlier this year that they would try hard to sign Mr. Silver to a new contract.

NBC News and its cable news channel MSNBC was another interested party.

In an e-mail several weeks ago, Mr. Silver said negotiations were continuing with The Times “and I’m still trying to make a decision.” He informed The Times on Friday of his plan to leave.

He occasionally hinted in interviews and public appearances that his relationship with The Times had moments of tension. But it was mutually beneficial. The news organization gained Web traffic and prestige by hosting his work, and he received a salary, a wider audience and editorial support.

The same will most likely be true at ESPN.

James Andrew Miller contributed reporting.

Article source: http://www.nytimes.com/2013/07/20/business/media/nate-silver-blogger-for-new-york-times-is-to-join-espn-staff.html?partner=rss&emc=rss

Jobless Claims Decline, While Home Sales Rise

The number of Americans applying for unemployment benefits fell 23,000 last week to a seasonally adjusted 340,000, a level consistent with firm job growth.

And sales of new homes rose in April to the second-highest level since summer 2008, while the median price for a new home hit a high.

The Labor Department said on Thursday that the less volatile four-week average of jobless claims declined just 500 to 339,500. That is close to the five-year low of 338,000 reached in the first week of May. The four-week average is 9 percent lower than last November.

“The underlying story in jobless claims continues to be one of gradual improvement,” Bricklin Dwyer, an economist at BNP Paribas, wrote in a research report.

Unemployment claims are a proxy for layoffs. The decline in claims has coincided with steady job growth over the last six months. Since last November, employers have added an average 208,000 jobs a month. That is up from just 138,000 jobs a month in the previous six months.

Still, much of the improvement has come from fewer layoffs, not robust hiring. Employers laid off just 1.7 million workers in March, only slightly above the 12-year low reached in January. Overall hiring remains far below levels before the recession.

More than 4.7 million Americans were receiving unemployment benefits the week that ended May 4, down 23 percent from nearly 6.2 million a year earlier.

The United States still has 2.6 million fewer jobs than when the recession began in December 2007. The unemployment rate has fallen to a four-year low of 7.5 percent, from 10 percent in October 2009. Some of the decline is a result of many people giving up looking for work. The government counts people as unemployed only if they are searching for a job.

The Commerce Department said Thursday that sales of new homes rose to a seasonally adjusted annual rate of 454,000 in April. That was up 2.3 percent from March and slightly below 458,000 in January.

January and April had the fastest sales since July 2008.

The median price of a home sold in April was $271,600, the highest level on government records dating from 1993. The April price was 8.3 percent higher than in March and 13.1 percent higher than a year earlier.

Steady job creation and mortgage rates near record lows are encouraging more Americans to buy homes.

With the April increase, sales are now 29 percent higher than a year ago, but they are still below the 700,000 economists consider healthy.

The strength in April was led by a 10.8 percent increase in sales in the West. Sales in the South were up 3 percent, but sales fell 16.7 percent in the Northeast and 4.8 percent in the Midwest.

Sales of previously owned homes rose in April to a seasonally adjusted annual rate of 4.97 million, the highest level in three and a half years.

Greater demand, along with fewer homes for sale, is also increasing prices in most markets and encouraging more construction.

Applications for permits to build homes rose in April to the highest level in nearly five years. While construction of new homes and apartments slipped a bit in April, the decline occurred a month after construction topped one million for the first time since June 2008.

Article source: http://www.nytimes.com/2013/05/24/business/economy/jobless-claims-decline-while-home-sales-rise.html?partner=rss&emc=rss

Drug Makers Join Fight Against Doping

Now, a growing number of pharmaceutical companies are trying to prevent their drugs from experiencing the same fate by joining antidoping officials to develop tests to detect the illegal use of their drugs among athletes.

Two major drug makers, Roche and GlaxoSmithKline, have begun evaluating every new drug candidate for its potential to be abused by athletes and have agreed to share information about those products with the World Anti-Doping Agency, known as WADA, which polices drug use in international sports. Several other smaller companies have provided proprietary information about specific drugs. A conference in Paris last November dedicated to the topic drew 250 participants.

The development reflects a significant shift from the days when drug makers paid little attention to how their products could be abused by athletes, said David Howman, the director general of the antidoping agency. In the past, drug makers “felt that any publicity in relation to antidoping control would be negative,” he said. “But what they discovered is the opposite happened.”

Instead of shying away from such stories, Roche and Glaxo have promoted their involvement as an example of good corporate citizenship. Last year, Glaxo went so far as to sponsor the testing laboratories for the London Games, the first time in Olympic history that an antidoping laboratory had a named corporate sponsor.

Pauline Williams, who leads the team at Glaxo that runs the antidoping initiative, said the cooperation with WADA grew out of that sponsorship. “What the London 2012 involvement led to was a real pride and willingness, and a positive attitude toward this continued engagement,” she said. Since the start of the program, the company said it has shared information about four of its projects, and development of a test for one drug is under way.

Antidoping officials have long sought information from drug companies. For instance, Amgen, which developed EPO, helped develop a test for Aranesp, another of its drugs that has been used in doping, in advance of the 2002 Salt Lake Olympics. But such arrangements were ad hoc and fairly simple, said Olivier Rabin, the antidoping agency’s science director. “It was almost more by chance when it was happening,” he said.

Relationships between antidoping officials and pharmaceutical companies have sometimes been tense. In 2006, Amgen was criticized for sponsoring the Tour of California at a time when EPO abuse was rampant among cyclists. Although the company said it had sponsored the race to raise awareness about doping, it was later revealed that the organizers had failed to test for EPO, short for synthetic erythropoietin, a hormone that, like Aranesp, stimulates the production of red blood cells.

“They were associated with some things in the past which we felt were probably inappropriate,” Mr. Howman said. “What we had to do was start the conversation from scratch, and say let’s see how we can work together.”

Steven Elliott, the Amgen scientist who invented Aranesp, said the misperceptions went both ways. He said some believed, wrongly, that biotechnology companies were developing drugs that could be misused by athletes as a way to increase sales. “There was this uneasiness about that,” said Mr. Elliott, who recently retired but continues to work as a liaison between biotechnology companies and the antidoping agency. “There had to be this realization that it was a win-win for both sides.”

Antidoping officials began to work more closely with drug makers after 2004, when Dr. Rabin heard that athletes were talking about a new version of EPO, called CERA, that was being developed by Roche, and asked the company for help.

“We were shocked when they first contacted us,” recalled Barbara Leishman, who oversees the antidoping program there. She said company scientists had not realized that athletes were following the drug’s development so closely. “This is not the sort of thing we like to hear about our compounds.”

Roche then worked with the antidoping agency to develop a blood test for the new drug, turning over proprietary compounds, called reagents, that would help officials test for their drug. Because of the complex nature of the drug, which mimics the body’s own hormones, and of the development of the test, the project took years.

In 2009, blood samples from six athletes taken during the Beijing Olympics tested positive for CERA. Other drug makers took note of the media attention Roche received for the collaboration, Mr. Howman said. “Once there’s a foot in the water, then you can follow and walk right in,” he said.

Roche broadened its agreement with WADA, expanding the project to screen all of its drugs in development. Glaxo followed suit and around the same time, two major industry groups representing biotechnology and pharmaceutical companies adopted policies encouraging their members to cooperate.

Halting the abuse of new prescription drugs is only part of the antidoping picture. Athletes today are believed to use a variety of methods to gain an advantage, from transfusing their own blood to taking tiny quantities of tried-and-true doping agents. And some performance-enhancing drugs gain life in illicit laboratories, as was the case with “the clear,” the designer steroid developed in the Bay Area Laboratory Co-operative that toppled star athletes like Marion Jones.

Still, pharmaceutical companies have an important role to play given how complex new drugs have become, and how athletes are increasingly using substances that closely mimic the body’s natural processes, officials said.

“Developing detection methods to show that the substance taken in a synthetic form is different than your natural substance is more challenging,” said Matthew Fedoruk, the science director for the United States Anti-Doping Agency.

Many pharmaceutical companies already have the tools to create a doping test for their products because the Food and Drug Administration and other regulatory bodies require them to show how the drug passes through the body. During the development process, the companies design reagents to help identify the drug. Amgen and other companies, like the biotechnology company Affymax — which makes a competing anemia drug called Omontys — have given WADA some of these reagents for use in developing tests.

Still, Dr. Rabin and others said some companies needed persuading and did not return his calls. In those cases, he said, he uses peer pressure, reminding them that other companies are also participating.

“We know the progress of their drugs, and we know that at some point collaboration will naturally come,” he said. “We are a bit stubborn.”

Article source: http://www.nytimes.com/2013/02/19/business/drug-makers-increasingly-join-fight-against-doping.html?partner=rss&emc=rss

IHT Special: Sanctions Chill Reaches Banking Clients in the Persian Gulf

Banks like Barclays and HSBC have begun turning away new customers from countries that are facing sanctions. They are closing down some existing accounts, further isolating Syrian and Iranian citizens from the global financial industry.

Mary Rose Khamasmieh, a Syrian public relations professional who has lived and worked in Dubai since 2005, has used HSBC as her bank for the past six years. Since last November, she has received a flurry of notices from HSBC requesting more information, including her visa validity and work history.

“This is the most information they requested since I opened the account, and they said if I didn’t give them information my account would have to close,” she said. “It went well for me and I continue to bank with HSBC, but I do have some Syrian friends that were forced to find another bank or even leave the country.”

Also under the new measures, Syrian or Iranian customers with bank balances of less than 100,000 dirhams, or $27,225, will be asked to close their accounts within 30 days. Customers with salaries of less than 15,000 dirhams will also be affected.

This is because the cost to the bank of making the enquiries necessary to enforce compliance is higher than the benefit or “profit potential” of keeping a customer with a small bank balance. It is cheaper for HSBC to close an account or not to open a new one with a balance of less than 100,000 dirhams.

Banks have increased due diligence procedures for clients from countries facing sanctions by the United States or the European Union and for any customer who conducts business or lives there. This means that if the bank is not satisfied with the information a customer provides, it will not accept the customer’s business. By doing this, banks are hoping to avoid hefty penalties imposed by regulators related to sanction evasion.

In December 2011, the U.S. government issued a new set of laws that were enforced in March 2012 to penalize any significant transaction by a foreign bank involvijng a country like Iran that was facing sanctions by threatening to close down a bank’s correspondent account. This means that the bank would not be permitted to make a wire transfer in U.S. dollars anywhere in the world.

“This will bankrupt banks, not being able to conduct dollar transactions,” said Ramsey Jurdi, a compliance attorney specializing in sanctions who is based in the Dubai office of Chadbourne Parke, a New York law firm. “This is in line with a gradual tightening of sanctions focused on this point of leverage over the last two years.”

HSBC’s stricter compliance approach in the region is part of a global measure to avoid penalties and improve transparency. In December, HSBC, one of the largest banks in Europe, paid a $1.92 billion fine related to illegal funds from Mexican drug cartels and money-laundering from Iran. To avoid further risk, HSBC is now closing the accounts of some customers with links to Syria and Iran, though it has no presence in those countries. In all, HSBC has 14 offices in the Middle East and North Africa.

“HSBC has a commitment to adopt the highest compliance standards, and as a result we must apply enhanced oversight on any customer with connections to sanctioned countries,” an HSBC spokeswoman, based in Dubai, wrote in an e-mail. “Where we are unable to maintain sufficiently detailed information about such a customer through a relationship managed account, we have to discontinue that relationship.”

Enforcement is becoming stricter. In 2010, Barclays paid $298 million in fines related to sanctions breaches, including transactions connected with Iran, Cuba and Sudan. More recently, Standard Chartered Bank settled $327 million in fines in December 2012 over dealings with Iran, Libya, Myanmar and Sudan.

“The Iranian financial industry has become very isolated,” said Mr. Jurdi of Chadbourne Parke, adding this was one reason banks had become more diligent with regard to Iranians and Syrians. “With financial isolation, people are finding new ways of evading sanctions by conducting banking offshore or listing a company account as an individual account so fewer questions are asked.”

While this has raised compliance standards and costs, some banks are not universally turning down customers from certain countries, so long as enough due diligence is done.

“Standard Chartered does not sever relationships with clients based on their nationality, and we adhere to the highest standards of compliance to local and international standards,” Ramy Lawand, spokesman for Standard Chartered Bank in the Middle East and North Africa, wrote in an e-mail. Standard Chartered is focused on Asia, Africa and the Middle East, which generate 90 percent of its profit and revenue.

Barclays and Mashreq Bank have also tightened their compliance standards. Barclays no longer accepts corporate accounts for Syrian, Iranian or Sudanese companies, and assesses more carefully any funds flowing to or from residents of countries facing sanctions.

“Barclays works closely with regulators and abides by their requirements in all the jurisdictions we operate in,” a spokesman for Barclays, based in Dubai, wrote in an e-mailed statement.

Hossein Asrar Haghighi, co-founder of the Iranian Business Council, a nonprofit, nongovernmental network for Iranian businessmen in the United Arab Emirates, said banks were playing it safe, preferring to eliminate Iran from their portfolios. “It doesn’t really matter if a person is rich or poor, the problem is that they are Iranian, and it’s getting harder to find a bank that’s O.K. with that.”

Article source: http://www.nytimes.com/2013/02/14/world/middleeast/sanctions-chill-reaches-banking-clients-in-the-persian-gulf.html?partner=rss&emc=rss

State Education Contract Canceled With News Corp. Subsidiary Wireless Generation

The New York State comptroller’s office has rejected a $27 million contract with a News Corporation subsidiary to build a data system for tracking student performance, as fallout widens against the international media conglomerate due to a phone hacking scandal in Britain.

Thomas P. DiNapoli, the state comptroller, had given the green light to state education officials in May to pursue a no-bid contract with Wireless Generation, an education technology company based in Brooklyn in which News Corporation had acquired a 90 percent stake last November for more than $360 million.

Last week, however, Mr. DiNapoli decided that the revelations surrounding News Corporation had made final approval of the contract untenable. In a rejection letter, first reported on Saturday by The Daily News, he told state education officials that they should instead put the project out to bid to a variety of companies.

“We believe the record remains incomplete with respect to the vendor responsibility issues involving the parent company of Wireless Generation,” the letter said.

The comptroller’s office also said it now believed other companies could do the work, making a competitive bid necessary.

The concerns that killed the state contract follow other questions raised about Wireless Generation’s work in New York City.

The company was acquired by News Corporation just weeks after Joel I. Klein, a former New York schools chancellor, left city employment to work for News Corporation as vice president of educational technology. Wireless Generation helped to develop and run the city’s $80 million student data system, known as ARIS, as well as the technology behind one of Mr. Klein’s favorite projects, a computer-based learning model known as School of One.

Strict city ethics rules prevent former officials from working on matters they had substantial involvement in as city employees; News Corporation said Mr. Klein had no involvement with the purchase of Wireless Generation, which had been in the works for several months before he joined the company.

New York will still work with Wireless Generation indirectly, as part of a consortium of states building a shared data framework known as the Shared Learning Collaborative. Financed by the Bill and Melinda Gates Foundation, the $44 million project, awarded to Wireless Generation in June, is being directed by Stacey Childress, a former board member at Wireless Generation. She stepped down and sold her stock in the firm before taking the position at the Gates Foundation, a Wireless Generation spokeswoman said.

In the wake of the most recent revelations of phone hacking by The News of the World, the British tabloid that News Corporation closed in July, the state and city teachers’ unions and other critics wrote to the comptroller to ask him to deny the data system contract on ethical grounds.

“It is especially troubling that Wireless Generation will be tasked with creating a centralized database for personal student information,” the New York State United Teachers wrote in a letter, “even as its parent company, News Corporation, stands accused of engaging in illegal news gathering tactics, including the hacking of private voice mail accounts.”

Wireless Generation said it was disappointed with the comptroller’s decision and was weighing whether to submit another bid.

The State Education Department — which had been trying to move quickly with the project because it is part of a series of efforts being financed by a Race to the Top federal grant with a four-year timetable — accused the comptroller’s office of playing politics.

“The comptroller has allowed political pressure to get in the way of vital technology that would help our students,” said Jonathan Burman, a spokesman for the department. “Our office will review all options to implement the kind of system our schools need to move forward.”

Article source: http://feeds.nytimes.com/click.phdo?i=35f806aea6b0dbd7a7ec04204c08314d

Sokol’s Ways Questioned in Past Suits

The most serious lawsuit centered on the accounting of an irrigation project by MidAmerican Energy, where Mr. Sokol was chief executive when Berkshire bought it in 1999.

In a rebuke last year, the judge ruled in that case that MidAmerican had improperly changed its accounting on the project and criticized Mr. Sokol directly. The change in accounting was “intended to eliminate the minority shareholders’ interests,” the judge wrote, awarding more than $32 million to the minority shareholders. The case had taken more than five years to work its way through the courts. During that time, Warren E. Buffett, the chief executive of Berkshire, expressed confidence in Mr. Sokol by broadening his portfolio beyond MidAmerican to include Netjets, a company that sells fractional use of private aircraft.

After Mr. Sokol took over Netjets in July 2009, some critics complained about his management style and his strategy for shrinking the company, which had been ailing even before the financial crisis did more severe damage.

Under Mr. Sokol’s direction, the aircraft company filed a suit last November seeking to learn which employees had provided information to Alice Schroeder, the author of “The Snowball,” the best-selling biography of Mr. Buffett. Ms. Schroeder declined to supply the information, and her lawyer characterized the action as a witch hunt. The suit was dropped on Monday.

The lawsuits would have been “yellow lights: if not danger signals, at least warning signs,” Ms. Schroeder said in an interview on Monday. “Disputes in business are common, but both of these speak to the integrity of the management, not just ordinary business wrangling.”

Some others have questioned Mr. Sokol’s hard-charging style as well. Michael Lissack, who was an investment banker at Smith Barney in the late 1980s, worked with Mr. Sokol when he ran Ogden Projects, the resource recovery subsidiary of the Ogden Corporation.

He characterized Mr. Sokol as “very bright” but at times wondered about his motivation. “There is nothing wrong with being tough,” Mr. Lissack said. “There is something wrong with only looking out for No. 1 when you pretend to be a team player.”

The Netjets suit was dropped less than a week after Mr. Sokol said he was resigning from Berkshire, which acknowledged that he had owned shares of Lubrizol, a specialty chemicals company, before Berkshire announced it would acquire the company.

Investment bankers talked with Mr. Sokol about Lubrizol as a possible acquisition target. In January, Mr. Sokol accumulated about $10 million in shares of Lubrizol and had a discussion with Lubrizol’s chief executive. Mr. Sokol subsequently promoted the company to Mr. Buffett, Mr. Buffett has said.

Two months later, when Berkshire agreed to buy the company, Mr. Sokol’s shares soared about $3 million in value.

After the resignation, Mr. Buffett said that he did not believe the purchases were unlawful. He also said that they were made before Mr. Sokol had discussed Lubrizol with Mr. Buffett, so he could not have known whether Mr. Buffett would be in favor of a deal.

At Netjets, Mr. Sokol faced a difficult task because of the recession and because, by most accounts, the company had grown bloated. Ms. Schroeder, who tracks Berkshire and its companies, noted that Netjets had shown improvement, but added that public information was very limited because the company was a tiny part of Berkshire.

The Netjets lawsuit “claimed that some employees, or at least one employee, had violated his or her confidentiality agreement with Netjets by forwarding an internal e-mail from Mr. Sokol distributed to more than 2,000 of the companies’ employees,” said Cameron Stracher, of counsel to Levine, Sullivan, Koch Schulz, the firm representing Ms. Schroeder.

In January, the company started a proceeding in Ms. Schroeder’s home state of Connecticut to subpoena her to produce her sources. “To sue to get an e-mail that was distributed companywide is clearly a witch hunt,” Mr. Stracher said.

Michele L. Noble, a partner at Thompson Hine, the firm representing Netjets, said she could not comment on the company’s decision to withdraw its suit. Mr. Sokol did not return e-mails, and a company spokeswoman declined to comment.

Article source: http://feeds.nytimes.com/click.phdo?i=3abc35ce13260124d176dfc3d224076a