June 7, 2002

Investment bankers and lawyers say that two latest European Union court rulings affecting mergers are unlikely to set off immediate surge of deals but will help foster cross-border mergers in future; one ruling overturned 1999 decision blocking merger of two British travel companies on antitrust grounds, and the other restricted use of 'golden shares,' which permit governments to control company by invoking special rights, like power to veto major decisions, including takeovers (M)

Mayor Michael R Bloomberg and New York State legislative leaders reach tentative agreement that would give mayor control of New York City's problem-plagued school system and strip local school boards of their last major power; plan, if approved by Legislature in next few weeks, is most significant overhaul of system in more than three decades; it mostly returns management of school system to form it took until 1969, when State Legislature decentralized it to reduce power of mayor and give neighborhoods more say in how schools are run; if deal goes through, Board of Education will expand to 13 members from 7, and mayor will appoint 8-member majority; schools chancellor will be board's presiding officer and report directly to mayor; Bloomberg wins right for chancellor to appoint local school superintendents directly, instead of choosing among candidates proposed by city's 32 local boards; it is not clear whether local school boards will be abolished, as Bloomberg wants; they were created in 1970 to give communities more power over schools, but have long been criticized as ineffective and often corrupt; any plan to abolish local boards would need approval from federal Dept of Justice, to ensure that voting power of minorities is not diluted; photos; charts showing current and new structures of school management in New York City (L)

The sudsy film adaptation of two best-selling novels by Rebecca Wells tells of mother-daughter strife, alcoholism and other ills besetting a Louisiana family over three generations. Sandra Bullock is a New York playwright dragged home by her mother's friends on a family peace-making mission. Ellen Burstyn is Mom, a dithery drama queen, and Ashley Judd the same Mom as a harried, embittered young mother with a drinking problem. Fionnula Flanagan, Shirley Knight and Maggie Smith are the three childhood friends with whom Mom formed a pact of friendship more than half a century earlier. The connections between past and present feel tenuous, and the Oprah-ready mood of uplift is tainted with a strain of cuteness. — Stephen Holden

Almost a decade after the Hackensack Water Company donated a mammoth water filtration plant here to Bergen County, the property finds itself in the middle of an unusual battle, with historic preservationists on one side and local officials and environmentalists on the other. The National Trust for Historic Preservation, a private nonprofit group in Washington, today named the Hackensack Water Works to its annual list of the 11 most endangered historic sites in America, a designation that has helped other sites in the country avoid the wrecking ball.

Mike Wise On Pro Basketball column argues that New Jersey Nets, despite compelling story of guard Jason Kidd, cannot compete with drama associated with Los Angeles Lakers, who attract entourage of celebrity fans and act like celebrity dynasty; photo (M)

Six-hour Israeli assault on Yasir Arafat's command compound in Ramallah kills two people, leaves half dozen buildings in ruins and renders position of aging Palestinian leader shakier than ever; attack is swift reprisal for suicide car bombing of bus by Islamic Jihad that killed 17 Israelis, mostly young soldiers; diplomats say United States was not notified in advance of assault; assault may draw Prime Min Ariel Sharon closer to his declared goal of ridding Israel of Arafat, partly by pushing notion to front of public and international debate; assault and discussion of Arafat's future are likely to overshadow talks Pres Bush will hold this weekend with Pres Hosni Mubarak of Egypt; after Israelis pull out of Ramallah, Arafat emerges defiant to view wreckage; points to hole cut by tank shell in his bathroom wall and accuses Israel of trying to kill him; photo (M)

Estate Tax Repeal Advances Trying to put election-year pressure on the Democratic-led Senate, the Republican-led House voted, by 256 to 171, to make permanent a repeal of the estate-tax. PAGE A16 Diplomacy Over Kashmir Deputy Secretary of State Richard Armitage began his shuttle diplomacy in Pakistan and offered what officials said was blunt talk in a bid to ease tension with India. PAGE A8

Industrial and Commercial Bank of China, nation's biggest lender, cuts 10 percent of its staff and branches in 2001 to rebuild business with $96 billion in bad loans, about a fifth of its assets (S)

Federal appeals court strikes down New York State law barring Consolidated Edison from charging customers about $200 million for expenses related to 11-month shutdown of Indian Point nuclear power plant; ruling cites US Constitution's ban on 'bill of attainder,' determination of guilt by legislature rather than court; legal scholars say ban has never been applied to corporations and see potential for limiting penalties against business for wrongdoing (M)

Compagnie Financiere Richemont says its second-half profit fell 13 percent, hurt by higher costs and stagnant sales; graph (S)

Japan emerges from recession as its economy expands by 1.4 percent during first quarter; exports rise 6.4 percent, and consumer spending rises 1.6 percent; corporate capital spending, however, drops by 3.2 percent, holding overall growth below level forecast by analysts; figures give minor lift to Prime Min Junichiro Koizumi, whose disapproval rating in public opinion polls is now higher than his approval rating; World Cup soccer championship is attracting about 400,000 foreign visitors to watch game, but skeptics doubt if tournament wil give more than temporary boost to economy (M)

Pres Bush tells Pres Vladimir V Putin that US will begin regarding Russia as market economy, change in semantics that has significant practical consequences for Russian-American trade; European Union has taken similar step; Russia has complained that its Communist past has been used as excuse to treat it unfairly in trade disputes; Russia still wants US to scrap economic sanction imposed in 1974 to press Communist-bloc nations to allow free emigration (M)