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April 27, 2005
Markup Forcing Senators to Take Sides on Asbestos Bill
Critics and supporters of the asbestos bill faced off at a Senate
hearing yesterday as Judiciary Chairman Arlen Specter (R–Pa.)
worked to pull together a bipartisan coalition to move the bill through
his panel this week, CongressDaily reported. Sen. Edward
Kennedy (D–Mass.) and Minority Whip Richard Durbin (D–Ill.)
questioned whether the trust fund would fairly compensate victims. Sen.
Russell Feingold (D–Wis.) said he could not support the current
version, but added that he was not “unalterably opposed” to
a trust fund bill. Panel Republicans also criticized the bill, although
they said they could change their minds if some changes are made. But
the bill also won some endorsements. Sen. Jeff Sessions (R–Ala.)
appeared to embrace Specter’s approach. National Association of
Manufacturers President John Engler said the enactment of the asbestos
bill could pump $137 billion into the economy. Citing a study by NERA
Economic Consulting, Engler said the bill would create a bounce in the
stock market that would benefit workers and retirees, the newswire
reported.
Adelphia Auditor Agrees to Pay $50 Million into Investors’
Fund
Deloitte & Touche will pay $50 million into a fund to compensate
investors in Adelphia Communications, resolving civil and administrative
proceedings brought by federal regulators, Reuters reported. The firm,
which was the auditor used by Adelphia, will pay $25 million to resolve
a civil lawsuit filed by the Securities and Exchange Commission
yesterday and another $25 million in an administrative penalty. That is
the largest fine ever paid by an accounting firm.
Equitable Life CEO Did Not Identify Past Failures by E&Y
The CEO of Equitable Life said yesterday that when he took control of
the U.K. life insurer in 2001 he did not identify any fundamental past
failures on the part of its auditors Ernst & Young, Reuters
reported. Equitable Life pulled back from bankruptcy in 2000 and is
suing Ernst & Young for up to £2.05 billion ($3.93 billion)
for failing to warn it of the financial abyss created by over-generous
guarantees on its insurance policies.
Stelco Bankruptcy Protection Extended to July 8
Stelco Inc. said yesterday the court overseeing its restructuring has
extended its bankruptcy protection until July 8, Reuters reported. The
company, which has been protected under the Companies’ Creditors
Arrangement Act since January 2004, said the extension will help it
remain financially stable while it pursues its capital-raising
process.
Bondholders Win $192 Million in Safety-Kleen Lawsuit
Two of Safety-Kleen Corp.’s former executives have been ordered
to pay $192 million to bond investors who lost millions of dollars in
the company’s 2000 bankruptcy, Reuters reported. The investors,
led by American High Income Trust, had accused Safety-Kleen’s
officers, directors and auditors of filing false registration documents
for the company’s bond offerings. The judgment was entered against
Safety-Kleen’s former CEO, Kenneth Winger, and its former CFO,
Paul Humphreys, on Friday after a seven-week jury trial in U.S. District
Court in Columbia, S.C.
Delta at Risk for Bankruptcy Filing
Delta is again at risk of having to seek chapter 11 bankruptcy
protection, according to Calyon Securities airline analyst Ray Neidl,
Forbes reported. Neidl estimated in a research note issued
yesterday that the carrier is spending $4 million in cash a day. Without
an improvement, that could drop its unrestricted cash reserves to $1.47
billion by the end of June and $466 million by year’s end,
dangerous levels for a company with heavy debt and pension funding
obligations.
Judge Approves Hiring Consultants in Diocese Bankruptcy Case
A judge in the Tucson Catholic Diocese’s bankruptcy proceedings
has approved the hiring of consultants to assist lawyers representing
people who may file future claims that they were sexually abused by
priests, KVOA4 reported. Judge James Marlar approved the
request a day after attorneys Charles Arnold and A. Bates Butler III
urged the judge at a hearing to allow the hiring of child sexual abuse
experts Michael Bayless and Robert Emerick of Phoenix to help them
evaluate the number of potential claims.
Krispy Kreme to Restate Earnings for the Past Four Years
Krispy Kreme said in a filing with the Securities and Exchange
Commission that the decision was made last week by its audit committee
and management team to restate its financial statements for fiscal years
2001 through 2004 and for the first three quarters of fiscal year 2005,
the Raleigh Business Journal reported. The filing said
that, as a result, “such financial statements should no longer be
relied upon.”
Advent Files for Chapter 11 With $20 Million in Debt
Advent Networks Inc. is seeking chapter 11 bankruptcy protection as
it tries to reorganize more than $20 million in debt, the Austin
Business Journalreported. Over the past six years, Advent has
raised more than $24 million in venture capital and gathered another $22
million through various loans. As recently as 10 months ago, the company
raised $5 million from Houston-based Murphree Venture Partners, Southern
Union Co. in New Jersey.
Judge Approves Probe of Pillowtex Finances
A federal bankruptcy court judge has authorized an investigation into
financial dealings at Pillowtex during the months leading up to its 2003
closing, the Salisbury Postreported. The committee of
unsecured creditors in the Pillowtex case, which represents a varied
group of creditors from employees to vendors, asked for the probe.
Pillowtex declared bankruptcy in July 2003, putting more than 4,300
local residents out of work. In a filing in the U.S. Bankruptcy Court in
Delaware, the committee asked for an investigation of the actions of
former Pillowtex board members, former CEO David Perdue and other
executives.