April 26, 2004
Asbestos Negotiations to
Continue This Week
Negotiations aimed at settling
differences on asbestos legislation will continue this week, and Senate
Majority Leader Bill Frist (R-Tenn.) and Minority Leader Tom Daschle
(D-S.D.) have said they hope to reach a deal, CongressDaily
reported. The meetings, which are being led by Edward Becker, the
retired federal judge who has led previous negotiation sessions convened
by Sen. Arlen Specter (R-Pa.) will include lawmakers, industry and labor
stakeholders, and congressional staff. They will focus on the financial
aspects of the proposed asbestos trust fund, including how much money to
award asbestos victims and how many claims will be filed against the
fund.
Separately, trial lawyers and labor say a recently released
href='http://www.cbo.gov/showdoc.cfm?index=5392&sequence=0'>report on
asbestos that claims the proposed asbestos trust fund will be
underfunded boosts their argument.
Air Canada
Canada Mulls Bigger Foreign
Airline Stake
The Canadian government is
considering a plan to let foreign investors take stakes of up to 49
percent in domestic airlines in a package designed to help insolvent
carrier Air Canada, the National Post newspaper said on
Friday. The newspaper said the proposal was part of a package presented
to a cabinet committee. The foreign ownership cap is currently 25
percent. 'While the proposals would apply to the entire industry, they
are aimed mostly at helping Air Canada,' the paper said. Air Canada has
been in bankruptcy protection for over a year, and a potential rescue
deal with Hong Kong businessman Victor Li runs out at the end of the
month. Li has said his company, Trinity Time Investments, plans to pull
out of the deal because of large losses and the unions' opposition to
further labor costs cuts, Reuters reported.
Air Canada Splits Operational Side Into Two
Groups
Air Canada split the operational side of the airline
into two groups in a move aimed at placing a stronger focus on its
customer and operational performance, the Associated Press reported. The
airline said Steve Smith, formerly president of ZIP Air Inc., assumes
responsibility for the Customer Service group as senior vice president
of customer experience. Rob Reid, acting president and chief executive
of Air Canada Technical Services and vice president of system operations
control, has been appointed senior vice president of the operations
group. Air Canada also said that Rob Giguere, formerly executive vice
president of operations, is 'currently considering various future
options.'
Delta Air CEO Says Bankruptcy Easily
Avoided
Delta Air Lines Inc. CEO Gerald Grinstein said on
Friday he thinks the company can easily avoid bankruptcy despite its
ongoing financial difficulties, Reuters reported. At the annual meeting
of shareholders in Atlanta, he said a court-supervised restructuring
would be 'undesirable.' The 30 percent pay cut being sought from the
airline's pilots is a 'minimum number,' he added. Grinstein, asked if
the company had hired bankruptcy attorneys, said Delta has hired various
'professionals' to review a number of issues. He also said he expects to
announce a new CFO soon and is considering outsiders for the job.
Michele Burns, the current CFO, last week announced she was leaving,
following the departure of President Fred Reid, the newswire
reported.
NorthWestern
Former CEO Sues
NorthWestern Over Alleged Pension Cut
NorthWestern Corp.'s former
chairman and chief executive has filed suit against the utility company,
charging it failed to protect his pension when financial troubles
loomed. Merle D. Lewis, who retired from his posts at NorthWestern in
December 2002, said in papers filed Thursday with the U.S. Bankruptcy
Court In Wilmington, Del., that the company misapplied a special subsidy
he negotiated as part of his retirement package. As a result, the suit
said, Lewis is getting a pension of $4,900 a month, instead of the
almost $6,300 monthly pension he expected.
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Northwestern Corp. Restructuring Speed May Hamper Buyers
The desire of NorthWestern Corp.'s major debt-holders for a fast
resolution of the company's bankruptcy reorganization could work against
other buyers hoping to acquire the utility, a lawyer advising state
regulators says. According to an Associated Press article, Brady
Williamson, a Wisconsin lawyer who specializes in bankruptcy law, said
any new offer to buy the utility is starting from scratch in a
time-sensitive, complex process - one in which debt-holders want to get
their money back as quickly as possible. Interest rates also are at
all-time lows, and Federal Reserve Chairman Alan Greenspan said this
week it's inevitable that interest rates will be going up, increasing
the cost of borrowing, Williamson told the state Public Service
Commission Thursday.
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Ministry Paves Way For Parma
Soccer Club Insolvency
Italy's Industry Ministry has
approved a move by insolvent food group Parmalat to place Parma soccer
club under extraordinary administration and offer it protection from
creditors, a judicial source said on Friday, Reuters reported. Parmalat
was declared insolvent last December after revealing a
multi-billion-euro accounting hole. But the soccer club it owns -- one
of the most succesful in Italy in recent years -- had not been included
in the procedure. Now a Parma bankruptcy court will meet on Monday to
officially declare the team insolvent, following the ministry's move,
and the verdict will be recorded on Tuesday, the source said, the
newswire reported.
Mitsubishi Faces Bankruptcy,
Asset Sales
Mitsubishi Motors was facing
bankruptcy or an enforced sale Saturday after its majority owner refused
to bail out the financially ailing Japanese car giant, Reuters reported.
DaimlerChrysler, which gained a 37 percent interest in Mitsubishi four
years ago for $2.96 billion, confirmed it would not participate in a
$6.4 billion bailout of Mitsubishi. That decision sent Mitsubishi shares
dropping 25 percent Friday and raised the possibility of bankruptcy, the
Financial Times reported on Saturday.
U.S. Unit Of Katz Group Out Of Bankruptcy Protection
After closing more than 40 per
cent of its stores, a U.S. division of drugstore giant Katz Group Canada
Ltd., has emerged from chapter 11 bankruptcy protection,
Globeandmail.com reported. Snyder's Drug Stores Inc. now operates 122
corporate and franchised stores, down from a total of 208 outlets when
it went into chapter 11 last September. It shut all 77 of its Drug
Emporium stores, a chain acquired two years before it filed for
bankruptcy protection.
Kmart and Martha Stewart Living Omnimedia, Inc. Agree on
Amended Terms of Long-term License Agreement
Kmart Holding Corporation and Martha Stewart Living
Omnimedia, Inc. announced in a press release that the companies have
reached an agreement to extend and amend several terms in their
long-term distribution contract for the Martha Stewart Everyday brand
label. The revised agreement better aligns the two companies' mutual
business interests by extending the Martha Stewart Everyday partnership
two years, through 2009; expanding the scope to several new product
categories including ready-to-assemble furniture; eliminating the
product category minimum guarantee but not the aggregate minimum
guarantee features of the contract; and making other adjustments that,
taken as a whole, benefit both companies. In conjunction with this
amended agreement, Kmart also announced today that it will withdraw the
lawsuit -- pertaining to the interpretation of contractual language in
the original contract -- filed by Kmart against MSO IP Holdings Inc. in
Bankruptcy Court in February 2004, according to the press
release.
Don Johnson Files for Bankruptcy
Actor Don Johnson has filed for bankruptcy to protect
his Pitkin County ranch from being sold at auction, according to a
published report, the Associated Press reported. Timber Doodle Glade
Equity Venture LLC, a company controlled by the former 'Miami Vice'
star, filed for chapter 11 bankruptcy on April 14 in Denver Bankruptcy
Court, the Rocky Mountain News reported in weekend editions. Johnson's
bankruptcy lawyer, Lee Kutner, said on Friday that Doodle Glade is one
of two entities that hold title to the Woody Creek property that Johnson
purchased in 1987.The bankruptcy filing follows a Pitkin County lawsuit
brought by City National Bank of Los Angeles in March, asking the court
to allow the ranch to be auctioned to collect $930,000 Johnson owes the
bank, the newswire reported.
ISG Pushes Consolidation Of Steel Industry To New
Phase
International Steel Group's pending purchase of
bankrupt Weirton Steel signals the start of a new consolidation in the
steel industry, analysts say, the Associated Press reported. The $237
million US deal would make ISG the No. 1 domestic intergrated
steelmaker, surpassing U.S. Steel. Analysts expect the two companies to
continue purchasing bankrupt plants, but they don't anticipate any
bidding wars to continue.ISG and the company that formed it, WL Ross
& Co., have led the consolidation of the steel industry with four
acquisitions of bankrupt companies if the Weirton deal stands, the
newswire reported.
Prudential's Indonesia Unit Declared Bankrupt by Court
Prudential
size='3'>PLC's Indonesian unit was shut down today after it was declared
bankrupt by an Indonesian commercial court, the online Wall Street Journal reported. It is unclear how long
the local unit -- PT Prudential Life Assurance -- will remain closed as
the court's ruling is appealed. United Kingdom-based Prudential has said
it remains committed to its policyholders in
Indonesia.