The Germany media company that acquired the Jim Henson Co., creator of the Muppets, for $680 million last year, may put the Los Angeles company up for sale.

Officials with Germany’s EM.TV & Merchandising said that it had not reached a final decision, but industry sources said the cash-strapped firm is keen to sell the asset as part of efforts to shake off its recent financial troubles.

The acquisition of Henson was part of a year-long buying spree, which included a half share in the rights to Formula One racing, that saddled the Munich company with debt of more than $934 million.

Viacom Inc. and the Walt Disney Co. have been rumored as possible buyers of Henson, but for considerably less than the amount paid by EM.TV.

The Jim Henson Co., founded in 1958, is best known for its Muppets characters, whose blend of irreverent humor and entertainment led by Kermit the Frog, Miss Piggy and Big Bird, won viewers in more than 100 countries.

Allstate Boosts Rates

Allstate Insurance, the state’s second-largest auto insurer, is raising California drivers’ premiums 6.9 percent in a move that is expected to trigger other insurance companies to follow suit.

Allstate is the largest California insurer to raise its rates after years of price-cutting in the 1990s reduced overall premiums by more than 10 percent statewide. Allstate, which insures 2.1 million California drivers, lowered had its rates by 22 percent from 1996 to 1999.

Insurers have been predicting that auto insurance rates would rise since last spring. At that time, analysts said the California price war had gone too far, and a trade group warned that higher medical costs and jury awards would force premiums up nationwide.

Allstate blamed a rise in the number and severity of accidents for the increase, which is scheduled to take effect May 18. Rate changes of less than 7 percent do not require a hearing before the state Department of Insurance and usually are approved automatically by state regulators.

The increase would add about $48 to an annual $700 premium.

Meanwhile, a Los Angeles jury awarded Allstate Corp. $8.2 million in a landmark fraud case involving nine medical clinics accused of billing for treatments that were never rendered.

It was the first case tried under a 1995 California law that allows auto insurers to pursue civil fraud allegations in court rather than rely on regulators to tackle the cases. Allstate officials said the company hopes the ruling will have a deterrent effect on doctors who falsify billings or provide unnecessary treatments, fraud that costs policyholders billions of dollars.

In 1999, Allstate filed suit in Los Angeles County Superior Court against six doctors who ran nine Southern California clinics.

Allstate accused the doctors and clinics of altering medical records and bills to support insurance claims or personal-injury lawsuits against the insurer and its policyholders.

Allstate settled with three of the doctors for $180,000 and pursued the other three in court, officials said. The jury deliberated for about two weeks before finding the doctors liable for fraud.

Cornfield Going Green

The Cornfield, an abandoned downtown railroad yard that was slated for use as an industrial park, will be sold instead for public use as a park, low-cost housing and schools.

Officials with the nonprofit Trust for Public Land, said the group signed an option to purchase the 40-acre parcel near Chinatown from Majestic Realty Co. and Union Pacific railroad for $30 million.

The trust expects the state to repurchase the property near the Los Angeles River for creation of what would be the first sizable state park, open space and recreational complex in Los Angeles.

The purchase agreement will apparently end a lawsuit by Friends of the Los Angeles River and the Chinatown Yards Alliance to block construction of the proposed $80-million industrial park.

The suit, filed in September, charged that city officials erred in not requiring Majestic, the industrial park’s developer, to perform an environmental impact report on the land.

Dubbed the Cornfield because corn was grown there during the 19th century, the parcel was one of 32 blighted properties earmarked by the city for development. Mayor Richard Riordan supported development of the Cornfield as an industrial park, saying it would create 1,000 jobs.

Refinery Fined for Pollution

A Texaco subsidiary pleaded guilty March 12 to two felony charges and was fined $4 million for discharging millions of gallons of polluted wastewater into the Dominguez Channel near its Wilmington refinery and into a creek in San Luis Obispo.

A representative of Texaco Refining and Marketing Inc. of Houston entered the company’s plea to violating the federal Clean Water Act during a hearing in U.S. District Court.

Texaco’s guilty plea grew out of a four-year investigation by 15 federal, state and local agencies into operations at the company’s Wilmington refinery, a longtime target of environmental critics.

The refinery, located on Pacific Coast Highway, was found to have discharged excessively high levels of oily and greasy wastewater through an outfall into the nearby channel.

Under local environmental regulations, Texaco was permitted to release 15 parts of oil and grease per million gallons of water into the channel. But investigators discovered that the company was discharging 940 parts of pollutants per million, about 62 times the allowed limit, officials said.

The violations occurred in 1995 when Texaco experienced problems with a new wastewater treatment system at the refinery. Rather than shutting down operations, the company continued to flush millions of gallons of wastewater into the channel.

Texaco’s illegal discharges are not believed to have caused long-term damage to the already severely polluted Dominguez Channel, which runs from Carson to the harbor and has been a receptacle for urban runoff and industrial waste for decades. The U.S. Environmental Protection Agency and the state Regional Water Quality Control Board have identified Dominguez Channel as one of the most severely polluted waterways in Los Angeles County.

Under a plea agreement negotiated with prosecutors, Texaco Refining and Marketing will pay $4 million as a fine and up to $30,000 in restitution. About $3 million will be set aside for environmental projects.

The refinery is now owned by Equilon Enterprises, a joint venture of Texaco and Shell Oil.

Lights Out at Power Exchange

The California Power Exchange, the marketplace where electricity was bought and sold in the state under regulation, filed for Chapter 11 bankruptcy protection.

The exchange cited multiple lawsuits filed against the nonprofit corporation by generators since it announced it was closing down in January, according to a filing made in U.S. Bankruptcy Court.

A CalPX official said the Bankruptcy Court could better sort out the lawsuits and make sure generators owed hundreds of millions of dollars get paid.

A Bankruptcy Court judge may decide the outcome of a lawsuit filed against the CalPX and Gov. Gray Davis by Duke Energy, which alleged that forward power contracts held by the CalPX and seized by the governor were done so unlawfully.

The CalPX was set to liquidate forward power contracts totaling about $1 billion to pay power suppliers hundreds of millions of dollars owed by PG & E; Corp. unit Pacific Gas & Electric and Edison International unit Southern California Edison. Both utilities defaulted on payments to the CalPX.

Gov. Davis seized the contracts minutes before the CalPX was set to liquidate them.

A spokesman for Gov. Davis would not comment on the CalPX’s bankruptcy filing.

The CalPX, which at one point controlled about 85 percent of the state’s wholesale power market transactions, was established under the state’s 1996 landmark deregulation law. The exchange was set up to ensure that utilities paid a transparent price for power during the transition to deregulation.

The exchange operated a uniform price auction, meaning all sellers were paid the highest accepted bid for power, regardless of what their actual bid may have been. The state’s three investor-owned utilities were required to buy the bulk of their power through the CalPX.

In December, federal regulators announced that the CalPX’s tariff, which allows it to operate in the state as a Power Exchange, would not be renewed because it was one of the flaws that contributed to the failure of California’s wholesale power market.

Reshuffling Atop Boeing Satellite

Two top executives at El Segundo-based Boeing Satellite Systems have resigned in the first major shakeup since Boeing Co. acquired the commercial satellite maker in October.

Seattle-based Boeing said that Tig H. Krekel, president of the unit, and Joseph H. DeSarla, executive vice president, announced their intention to leave the company to pursue other opportunities.

Boeing, which tends to install its own managers after acquisitions, bought the former Hughes Space & Communications Co. from Hughes Electronics Corp. for $3.75 billion five months ago and renamed it Boeing Satellite Systems.

The company employs more than 8,000 workers in El Segundo and is the world’s largest maker of commercial satellites.

Randy Brinkley, senior vice president of programs for Boeing Satellite Systems, was appointed acting president as the company begins the search for a permanent replacement. Brinkley was program director for the space station at NASA until several years ago.

The move comes after one of the best years for the satellite unit, which had record deliveries last year and garnered a contract worth up to $1.3 billion to provide communications satellites for the Air Force.

Krekel, 47, was appointed president in January 1999 after a stint as president of AlliedSignal Inc.’s aerospace equipment business in Torrance. DeSarla, 55, was the unit’s No. 2 executive and had been named to the post just before the business was acquired by Boeing.