March 5, 2004
House Names Conferees on Pension Legislation
House Speaker Dennis Hastert (R-Ill.) yesterday named House conferees on
pension legislation, CongressDaily reported. Education and the
Workforce Committee Chairman John Boehner (R-Ohio) was joined by Reps.
Sam Johnson (R-Texas), Howard McKeon (R-Calif.), Pat Tiberi (R-Ohio),
ranking member George Miller (D-Calif.) and Rob Andrews (D-N.J.) from
his committee. House Ways and Means Chairman William Thomas (R-Calif.)
and ranking member Charles Rangel (D-N.Y.) were included, along with
Ways and Means member Rob Portman (R-Ohio).
Law Professors Warn Class Action Bill Could Clog Courts
Two law professors met yesterday with several Senate Democrats and
staffers to discuss their concerns that the class action bill awaiting a
Senate vote could create a 'logjam' of cases in the federal courts,
CongressDaily reported. 'My greatest fear is that these cases
will just languish and die in the federal courts once they're
transferred there' from state courts, said Harvard University law
professor Arthur Miller. Miller said the bipartisan class action bill,
which Majority Leader Bill Frist (R-Tenn.) expects to bring to the floor
later this month, would move an 'enormous block' of cases from state
courts to federal courts. Miller and Columbia University law professor
Samuel Issacharoff said they had urged several lawmakers to push for an
amendment that would provide federal judges with guidance for handling
class action cases that could be transferred from state court under the
bill, reported the newswire.
February Job Growth Surprisingly Weak
U.S. employers added 21,000 workers to their payrolls last month, far
fewer than expected, according to a government report today, Reuters
reported. The Labor Department said private-sector employment was
unchanged in February, while the government added 21,000 workers. The
report also showed job creation in November and December was weaker than
previously thought, adding to the weak tone of the report. The
department revised lower its count of job gains in December to 97,000
from 112,000 and for November to just 8,000 from 16,000. February's
unemployment rate held steady at 5.6 percent. Economists at top Wall
Street firms had forecast a February payrolls gain of 125,000 new jobs,
reported the newswire.
Productivity Growth, Orders, Jobless Claims Dip
U.S. worker productivity was lower than first thought in the fourth
quarter, but unit labor costs shrank by less than expected and weekly
jobless claims also fell, government data showed yesterday, Reuters
reported. First-time applications for unemployment insurance benefits
fell 7,000 to 345,000 in the week ended Feb. 28. 'With robust economic
growth and improving business confidence, we expect to see accelerating
employment gains in the months ahead,' said Gary Bigg at Bank of America
Securities.
The Labor Department also said non-farm business productivity increased
at a 2.6 percent annual rate in the final three months of last year,
versus an initially reported 2.7 percent increase. Productivity surged
9.5 percent in the third quarter and lifted profits but had been
expected to wear off. The real surprise was the upward revision to unit
labor cost numbers. 'It was all in the compensation numbers, which
doesn't tell me much about inflation, but tells me why consumers have
been able to remain such strong contributors to growth,' said Steve
Ricchiuto, chief U.S. economist at ABN AMRO in New York, reported the
newswire.
ADELPHIA COMMUNICATIONS
Director Describes Rigas Loans
Adelphia Communications Corp. board members were never informed that the
Rigas family used corporate loans to build a golf course and purchase
forest land, a former independent director told a federal jury
yesterday, the Washington Post reported. Dennis P. Coyle also testified
about attending a series of board meetings at which directors of
publicly traded Adelphia signed off on loans to companies privately
controlled by the Rigas family. Prosecutors entered documents into
evidence Thursday that showed that the Rigas-controlled enterprises owed
Adelphia $263 million by 2000, according to the newspaper. Read the
href='http://www.washingtonpost.com/wp-dyn/articles/A31983-2004Mar4.html'>full
article.
Condo Board Accuses Adelphia's John Rigas of Common-charges
Delinquency
The board of the Manhattan condominium building where Adelphia
Communications Corp. founder John Rigas lives says he hasn't paid
monthly charges for more than a year -- and it wants court permission to
sell his apartment, the Associated Press reported. Rigas is on trial for
allegedly stealing millions of dollars from his cable company. The board
of the Saratoga Condominium, on East 75th Street, said in papers filed
in Manhattan's state Supreme Court that Rigas hasn't paid common charges
since January 2003 and owes $14,689.62, which includes other assessments
and fees. 'By reason of such default, the condominium has filed a lien
against the premises' in the office of the city register on Feb. 2,
court papers say, 'and does hereby elect to foreclose upon the
lien.'
Rigas and his sons are on trial along with a fourth former executive in
U.S. District Court in Manhattan, charged with conspiracy, securities
fraud and bank fraud. All have pleaded innocent. Prosecutors say the
Rigases drove the cable giant into bankruptcy by treating the company as
their 'personal piggy bank' and stealing hundreds of millions of dollars
from 1999 to 2002, reported AP.
Two Largest Enron Creditors Oppose Restructure Proposals
The two largest creditors of Enron Corp. are objecting to proposals in a
chapter 11 bankruptcy reorganization plan by the company, the Associated
Press reported. Shareholders would get nothing and most creditors less
than 20 cents of each dollar on the debts the company holds, under the
plan to be considered in April. Citibank and J.P. Morgan Chase & Co.
said in filings on Wednesday that the company's plan isn't in the best
interest of creditors. Lawyers for the two companies said some with
claims against Enron would have been better off if the company had
liquidated under chapter 7.
In its bankruptcy plan, Enron has placed the banks' claims back in the
line of creditors and has sued the banks for compensation for their
alleged roles in deals that hurt the company. An April 20 hearing date
is set, AP reported.
Pilots For Air Canada and Jazz Reach Tentative Deal On Aircraft
Allocation
Pilots for Air Canada and its Jazz regional subsidiary have tentatively
agreed to a deal that defines who flies the airline's new smaller jets
seen as key to the company's post-restructuring business plan, the
Associated Press reported. Two unions representing pilots at the main
carrier and at the subsidiary have been negotiating since January on
which union's members would fly the new regional jets, since it would
mean more work for one union or the other. The company issued a
statement yesterday saying that the Air Canada Pilots Association and
the Airline Pilots Association had reached a tentative settlement over
the issue. Air Canada said it hoped members of both unions would ratify
the agreement by March 19, AP reported.
Penthouse Magazine Publisher Files New Reorganization Plan
For Business
General Media Inc., the publisher of Penthouse magazine, has
filed an amended reorganization plan that would allow parent Penthouse
International Inc. to retain ownership of the magazine, the Associated
Press reported. General Media, along with eight units, filed for chapter
11 bankruptcy protection in August. The company previously said it
expected to complete its restructuring and emerge from bankruptcy by
late February to early March.
In a news release yesterday, General Media said holders of its 15
percent senior notes due this year and the company's general unsecured
creditors would receive cash payment of their allowed claims in full
under the plan, if confirmed. Also, the company's outstanding Class A
preferred stock would be reinstated, and the common stock of the
reorganized company would be issued to Penthouse International, which
hasn't filed for bankruptcy protection and currently owns 99.5 percent
of General Media, AP reported.
Trustee, Creditors' Committee Propose New Process for Best Value
for Hawaiian Airlines
Hawaiian Airlines Trustee Joshua Gotbaum and its official committee of
unsecured creditors asked the bankruptcy court to approve a new,
competitive process to solicit potential investors in the airline, the
committee announced in a press release. Gotbaum and the committee
believe that, to get top dollar for Hawaiian, there needs to be open
competition, and the process they are proposing would provide it.
Gotbaum noted that three proposals had already been filed, and that the
new joint process would make it easier for others to come forward. Under
the process, qualified investors would be required to make formal
proposals in May. The trustee and committee would then evaluate them and
propose the best one to the bankruptcy court.
Bankrupt Textile Firm Pillowtex to Hold Auction as Part of
Liquidation
The 1,200 items to be auctioned are part of the liquidation of
Pillowtex, a towel-maker that had filed for chapter 11 bankruptcy
protection and closed last July leaving more than 7,600 out of work, the
Knight-Ridder reported. The sale is one of several being held across the
country through early July and includes manufacturing and warehouse
space. The company filed for bankruptcy protection in April 2002 and
last May, Springs Industries was said to be the leading suitor. But
Springs dropped out of negotiations and in July, Pillowtex closed 16
plants and laid off more than 5,000 in North Carolina alone, one the
state's largest lay-offs.
Spiegel Group's February Sales Fell 22 Percent to $93.8
Million
Spiegel Inc. reported net sales of $93.8 million for the four weeks
ended Feb. 28, a 22 percent decrease from $120.1 million for the
year-earlier period. In a press release, the company said net sales for
the eight weeks ended Feb. 28 fell 25 percent to $192.2 million from
$255.7 million. The company said same-store sales for its Eddie Bauer
division fell 2 percent for the four-week period and 4 percent for the
eight-week period.
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USG Seeks More Time to File Plan, Citing Court Delay
USG Corp. followed W.R. Grace & Co. in asking for more time to
file its chapter 11 plan to pay creditors, citing delays in court
proceedings to determine its asbestos liabilities. The building products
company wants a six-month extension, through Sept. 1, to file its plan,
according to papers filed Monday with the U.S. Bankruptcy Court in
Wilmington, Del. Grace in February also asked for a six-month extension
until Aug. 1 to file its plan. The companies' bankruptcy cases were
delayed because a district court judge overseeing portions of the case
was asked to step down.
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Creditors Oppose ISG Buyout of Weirton
A group of creditors owed $118 million by bankrupt Weirton Steel
objected yesterday to the proposed buyout by International Steel Group,
the Associated Press reported. In documents filed with the U.S.
Bankruptcy Court in Wheeling, attorneys for the informal committee of
secured noteholders said the sale undervalues Weirton's assets and won't
generate enough money for creditors. Weirton spokesman Gregg Warren said
the company aims to maximize its value for all parties. 'During the
auction process that will occur over the next several weeks, we'll know
whether or not the creditors' position concerning the value of the
company is accurate,' he said. A hearing on the proposed sale agreement,
the time line and the mandatory solicitation of counteroffers is set for
March 8, AP reported.
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