BRIEFCASE NAPSTER WINS OK OF LOAN AGREEMENT.

Byline: - Staff and Wire Services

WILMINGTON, Del. - Napster Inc., which filed for Chapter 11 bankruptcy protection early this month, won final approval Tuesday of a $5.13 million debtor-in-possession agreement with Bertelsmann AG, its prospective purchaser.

Napster, which stirred controversy as the provider of a free Internet music service, will use $4 million of the loan to fund business operations.

The remaining $1.13 million will fund a key employee retention plan, the terms of which were also approved Tuesday.

Court reinstates Suzuki's lawsuit

SAN FRANCISCO - A federal appeals court on Tuesday reinstated a defamation suit brought by Suzuki Motor Corp. against the publisher of Consumer Reports for saying the Suzuki Samurai rolls over too easily.

The 9th U.S. Circuit Court of Appeals, ruling 2-1, said a jury should determine whether Consumers Union rigged its testing for a published report labeling the sport utility vehicle ``not acceptable.'' The magazine first reported in 1988 that the Samurai ``rolls over too easily.''

Andersen lawyers want case tossed

HOUSTON - Lawyers for Arthur Andersen LLP have asked a federal judge to throw out the firm's felony conviction for shredding and doctoring Enron Corp.-related documents last year.

Lead lawyer Rusty Hardin filed a request late Tuesday that U.S. District Judge Melinda Harmon either toss out the jury's verdict or grant Andersen a new trial.

The 80-page filing called the guilty verdict ``insupportable'' and said the Chicago-based firm was convicted of obstruction of justice on the basis of ``conduct that was not criminal.''

Hardin and Andersen spokesman Patrick Dorton declined further comment. Bryan Sierra, spokesman for the Justice Department, also declined to comment and said prosecutors would likely respond with court filings after digesting Andersen's request.

WorldCom board shocked by probe

JACKSON, Miss. - An investigation by WorldCom Inc.'s board of directors uncovered nearly $3.8 billion in disguised expenses, the company said Tuesday, revealing what appears to be among the largest cases ever of accounting fraud.

WorldCom's chief financial officer, Scott Sullivan, who is also a director, has been fired, the company said, and senior vice president and controller David Myers resigned.

More than $3 billion of expenses in 2001 and $797 million for the first quarter of 2002 were wrongly listed on company books as capital expenses, the company said, and thus not reflected in its earnings results. It will restate earnings for all of 2001 and the first quarter of 2002.

When spending is listed as a capital expense, a company can delay applying it against earnings and spread its effect over many years, thus keeping its profits on paper higher. Standard accounting rules are relatively clear about what kind of purchases, for instance office equipment, can be listed as capital expenses and which must be listed as operating expenses and deducted immediately from profits.

``Our senior management team is shocked by these discoveries,'' John Sidgmore, who was appointed WorldCom's chief executive officer on April 29, said. ``We are committed to operating WorldCom in accordance with the highest ethical standards.''

TRW bidding war may be shaping up

Northrop Grumman officials indicated to TRW's top management on Tuesday that they would be willing to raise their bid for the company in hopes of finally securing a deal after being rebuffed for months, executives close to the negotiations said.

If Northrop proceeds with the new offer - worth about $58 a share, or $7.2 billion - this would be the second time the offer has been increased from a $5.9 billion bid in February for TRW, the military contractor and auto parts maker based in Cleveland.

The suggestion that Northrop would raise its offer comes as TRW is holding discussions with the General Dynamics Corp., BAE Systems of Britain and the Raytheon Co. about a possible deal for TRW's military assets, the executives said.