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April 4, 2005
House to Consider Bankruptcy Bill This Week
The Senate-passed bankruptcy bill (S. 256) will be a top agenda item
on Wednesday and Thursday this week in the House of Representatives. The
House returns on Tuesday afternoon from a two-week recess. House leaders
will seek to move the bill quickly and without amendment, thus avoiding
the need for a House–Senate conference.
MCI Resumes Deal Talks with Qwest
MCI Inc. resumed merger talks with Qwest Communications International
Inc. over the weekend, following Qwest’s latest proposal, the
Wall Street Journal reported. The move comes a day after
Qwest raised its takeover bid for MCI to $8.9 billion Thursday and set a
deadline of tomorrow for MCI’s board to accept the offer. MCI
agreed earlier last week to be acquired by Verizon in a cash-and-stock
deal valued at about $7.5 billion.
Aaipharma Likely to File Chapter 11
Drugmaker Aaipharma Inc. said today it is highly likely that it will
seek chapter 11 bankruptcy protection, after failing to make interest
payments on some corporate debt on April 1, Reuters reported. The
company said it has continued discussions with advisers regarding a
potential restructuring and agreed to a three-week exclusivity period
for a third party that is considering buying certain Aaipharma
assets.
Ormet Completes Reorganization, Exits Bankruptcy
Ormet Corp. said on Friday it has successfully completed its chapter
11 financial reorganization and exited from bankruptcy, Reuters
reported. The company filed for chapter 11 bankruptcy protection in
January 2004. At the time, it cited rising medical benefit costs, low
aluminum prices and weak demand that led to operating losses of $100
million for the filing.
United Airlines CEO Sees Big Opportunities in Asia
United Airlines, struggling to regain financial stability, is
considering new Asian routes where economic growth is fueling passenger
demand, United’s CEO said on Friday, Reuters reported. The carrier
must continue to bolster its position as a global airline, shifting U.S.
domestic capacity to international routes, said Glenn Tilton, in a
recorded message to employees. United, a unit of UAL Corp. has been
focusing on international expansion as a means to exit chapter 11
bankruptcy protection, the newswire reported.
Ross’s ICG to Buy Coal Companies, Launch IPO
Financier Wilbur Ross on Friday unveiled plans to acquire two coal
producers in an effort to transform U.S. mining as he did steel, Reuters
reported. International Coal Group Inc., of which Ross is chairman, said
it plans to buy the remaining stakes in the two companies it partly
owns—Anker Coal Group Inc. and CoalQuest Development LLC—for
$275 million in stock. Ross also plans to launch an initial public
offering of ICG within the next year to benefit from an industry that
currently is drawing heavy investment as coal prices soar on surging
global demand, the newswire reported.
ATA Unveils Winning Bid for Chicago Express
ATA Holdings Corp. decided on Thursday to sell its Chicago Express
commuter airline to Indianapolis real estate investor Edward
Okun’s firm, the Indianapolis Star reported. Okun
Enterprises was declared the winning bidder in the bankruptcy auction of
the 600-employee commuter line. The sale price was not disclosed,
although ATA earlier set $1 million as the minimum bid it would
accept.
Plan to Cut Retiree Health Benefits Rejected
In a ruling that directly affects millions of retirees, a federal
judge has struck down a proposed regulation adopted last year by the
Equal Employment Opportunity Commission that would have allowed
employers to reduce health care benefits for retirees as soon as they
become eligible for Medicare, the Legal Intelligencer
reported. In her 14-page opinion in AARP v. EEOC, U.S.
District Judge Anita B. Brody found that the proposed regulation
directly conflicted with a 2000 decision by the 3rd U.S. Circuit Court
of Appeals that explicitly barred such a practice. Read the full article
at
href='http://www.law.com/jsp/article.jsp?id=1112349914388'>www.law.com/jsp/article.jsp?id=1112349914388.
Asbestos Exposure of Owens Corning Is Set at $7 Billion
A federal judge has determined that building-materials maker Owens
Corning is exposed to $7 billion in potential liabilities for asbestos
damages, the online Wall Street Journal reported. The
ruling signed by U.S. District Judge John Fullam of Philadelphia is a
key decision in Owens Corning’s long-running bankruptcy case.
Financial creditors of the Toledo, Ohio–based company argued that
the company’s asbestos liabilities should be pegged at between $2
billion and $3 billion. Lawyers for asbestos claimants asked the judge
for an estimate of $11 billion. The assigned liability sets a baseline
for negotiations on a reorganization plan under chapter 11, the online
newspaper reported.