|
Nickles Drafting Measure To Restrict Asbestos Litigation
A spokeswoman for Senate Budget Chairman Don Nickles (R-Okla.)
confirmed on Friday that he is drafting an asbestos litigation reform
bill, CongressDaily reported. Nickles's decision to enter the
fray on asbestos reform, which is normally the purview of the Judiciary
committees in the Senate and House, raises the profile of the issue, and
comes as an encouraging sign, reform proponents said, reported the
newswire. Nickles's drafting coincides with a hearing he conducted last
week on reining in asbestos liability claims as a way of boosting the
economy.
Separately, Senate Judiciary Chairman Orrin Hatch (R-Utah) and
Judiciary ranking member Patrick Leahy (D-Vt.) also are working to forge
a consensus draft, according to the newswire. In the House, a
spokeswoman for Rep. Chris Cannon (R-Utah) yesterday confirmed he is
working with Rep. Calvin Dooley (D-Calif.) on asbestos litigation reform
legislation in that chamber, reported CongressDaily.
ENRON
Enron Creditors Sue Lay, Wife Over $84 Million in Loans
Enron Corp.'s creditors sued former Chairman Kenneth Lay and his wife to
recover more than $84 million in loans the company made to the couple
that, for the most part, were repaid with now-worthless stock, Bloomberg
News reported. The creditors claim the bankrupt company didn't get fair
value for loans made to Lay and his wife, Linda, before the former
energy trader collapsed in 2001. From May 1999 through November 2001,
the Lays used Enron shares to repay the Houston-based company knowing
the value of the shares was inflated, the suit said, reported the
newswire.
Enron Shareholders' Challenge to Dynegy Pact
Rejected
A federal judge has turned aside a challenge by Enron Corp. shareholders
to the company's $88 million settlement of a lawsuit it brought against
rival energy
company Dynegy Inc. for abandoning a $23 billion takeover, Bloomberg
News reported. Enron sued in December 2001, seeking $10 billion after
Dynegy cancelled an agreement to rescue the struggling energy trader.
The suit was part of Enron's chapter 11 case. U.S. District Judge Alvin
Hellerstein rejected a challenge to the settlement by Enron
shareholders, who said it might block their legal claims against Dynegy.
Shareholders can still sue Dynegy, Hellerstein said in a five-page
ruling, echoing an earlier one in October, reported the newswire.
WORLDCOM
WorldCom Cuts 5,000 Jobs to Help Save $2.5 Billion
WorldCom Inc., the telephone company seeking to emerge from the
biggest
bankruptcy, will cut 5,000 jobs, or 8.3 percent of its workforce, to
help reduce annual costs by $2.5 billion, Bloomberg News reported. The
positions to be eliminated are mainly corporate and administrative,
WorldCom said in a statement distributed by PR
Newswire. The last major round of job cuts from Clinton, Miss.-based
WorldCom, which has 60,000 employees, came in June, when the company
said it would slash 17,000 positions.
Bank Of America OK'd To Use WorldCom Cash To Repay
Debt
The bankruptcy court overseeing WorldCom Inc.'s chapter 11 case approved
a request by Bank of America N.A. to apply some WorldCom cash collateral
to outstanding debts, according to a court order obtained recently by
Dow Jones Newswires. The cash collateral is composed of funds from an
investment account in connection with a letter of credit the
telecommunications giant originally signed in 1996. The funds are held
in that account as part of a pledge agreement that entitles the bank to
shift funds out of the account to reimburse itself for any and all draws
under the 1996 letter of credit. Judge Arthur J. Gonzalez of the
U.S. Bankruptcy Court in Manhattan signed an order on Thursday that said
'it does not appear that allowing [Bank of America] to liquidate the
funds in the Investment Account would harm the interests of WorldCom's
creditors,' reported the newswire.
Mark Hamister Can't Meet Deadline to Buy NHL's Buffalo
Sabres
A group led by Arena Football League team owner Mark Hamister that was
the first choice to buy the bankrupt Buffalo Sabres failed to meet
ysterday's National
Hockey League-imposed deadline, leaving the team up for sale with a
potential for more bidders, Bloomberg News reported. Hamister and
Chartwell Investments President Todd Berman agreed in November to buy
the Sabres for $33 million in cash and assume $7.7 million of debt. The
sale was contingent upon them getting an additional $33 million from the
state of New York, Erie County and the city of Buffalo. Hamister had the
period as the lone bidder extended four times but couldn't secure
government aid. His group can continue working on its bid and re-submit
another offer, reported the newswire.
World Kitchen Reduces Debt, Emerges From Bankruptcy
WKI Holding Company Inc., whose World Kitchen subsidiary makes
CorningWare and Pyrex brand housewares, emerged from bankruptcy
protection with less than half
of its approximately $812 million of debt, Bloomberg News reported. The
company also announced yesterday that it had chosen new directors, which
include C. Robert Kidder, chairman and chief executive officer of Borden
Chemical Inc. World
Kitchen filed for chapter 11 last year, reported the newswire.
Will AMR Join UAL, US Air in Bankruptcy?
AMR Corp.'s American Airlines has cut many of its operating costs as
deeply as it can, but if nothing changes, the airline could still end up
in bankruptcy court, the Wall Street Journal reported. Even
though AMR currently has about $2 billion in unrestricted cash, enough
to carry it through this year, its stock has fallen to a near-bankruptcy
level--under $3 a share. To read the full article, point your browser to
www.wsj.com (subscription required).
Comdex Manager Key3Media Files for Chapter 11 Protection
Key3Media Group Inc., the operator of the giant Comdex trade show, filed
for bankruptcy protection yesterday, the Wall Street Journal
reported. The company has been hit hard by the technology slump, which
depressed interest in its events. Key3Media said its filing, made in the
U.S. Bankruptcy Court in Wilmington, Del., is part of a recapitalization
plan that, if approved, would leave the company in the ownership of
investment bank Thomas Weisel Capital Partners, reported the
newspaper.
Under the plan, Weisel, which already owns a large portion of
Key3Media's $372 million debt, would assume a larger share while
providing the company with $30 million in debtor-in-possession
financing. Los Angeles-based Key3Media said it aims to emerge from
chapter 11 under its current management, within 90 days of filing, the
Journal reported.
Panaco Files Chapter 11 Plan; Icahn May Get Control
Panaco Inc. has filed a chapter 11 reorganization proposal under which
an affiliate of financier Carl C. Icahn might receive 100 percent of the
equity in the reorganized company, according to a disclosure statement,
Dow Jones reported. The affiliate, High River L.P., holds most of
Panaco's $100 million of 10.625 percent senior notes due in 2004. Panaco
estimated High River has bondholder claims totaling $99.2 million,
according to the statement, filed with the proposed reorganization plan
on Friday in the U.S. Bankruptcy Court in Houston, reported the
newswire.
Bankruptcy Court Lets Bethlehem Steel Amend Loan, Pay Fee
The court handling Bethlehem Steel Corp.'s chapter 11 case has
authorized the company to amend its debtor-in-possession loan and pay
the lenders a $600,000 amendment fee, according to court papers, Dow
Jones reported. The amendment eliminates a default clause that would
have been triggered by the Pension Benefit Guaranty Corp.'s proposed
takeover of the company's pension plans. By waiving that default, the
status quo of the $450 million DIP loan financing is preserved. Judge
Burton R. Lifland of the U.S. Bankruptcy Court in Manhattan approved
the amendment on Thursday, according to court papers.
Goldman Industrial Asks Court To Convert Case To Chapter 7
Goldman Industrial Group Inc. is asking the bankruptcy court overseeing
its case to convert the proceedings to a chapter 7 liquidation because
the company doesn't have enough funding to continue under chapter 11
protection, Dow Jones reported. The company, which provided metalworking
machinery to manufacturers, said that it and its subsidiaries have
ceased operations, and 'there is no likelihood of rehabilitation.'
Goldman Industrial wouldn't be able to put a chapter 11 liquidation plan
into effect because of insufficient funding, the filing said, reported
the newswire. Converting the case to a chapter 7 liquidation would be in
the best interests of the company, its creditors, the estate and other
interested parties, according to the motion, obtained by Dow Jones
Newswires.
Mattel CEO Doesn't See Better '03 Retail Environment
Mattel Inc. Chairman and Chief Executive Robert Eckert said he doesn't
expect the challenging retail environment, dotted with store closures
and reorganizations, to subside in 2003, Dow Jones reported. 'This was
one of the worst overall retail environments in recent years,' Eckert
said during a conference call to discuss earnings on Monday. However,
Mattel's core brands, such as Barbie and Hot Wheels, remained big
sellers in the year and fourth quarter. Mentioning retailers like Kmart
Corp., which entered bankruptcy protection last year and picked 326
stores for closing, Eckert said store shutdowns put pressure on Mattel's
sales in 2002. At the same time, most retailers had sales below
expectations, he said.
Credit-card Debt Mounting for Depression Generation
Today's retirees are rapidly joining the ranks of the millions of
Americans who max out their credit cards, the Sun-Sentinel
reported. The result is that for the first time in their lives, some
seniors are dealing with managing mounting credit card debt and, in the
worst cases, filing personal bankruptcy. Credit card debt is the most
common reason this action is taken, bankruptcy lawyers say, reported the
newspaper.
Although statistics on debtors by age are hard to come by, 'I
definitely can tell you that in my last couple of years in practice, I
saw more seniors than ever before,' said attorney John Rao, now with the
National Consumer Law Center in Boston. To read the full article, point
your browser to
href='http://www.sun-sentinel.com/business/local/sfl-ybmature03feb03.story'>http://www.sun-sentinel.com/business/local/sfl-ybmature03feb03.story.
Don't Look for a Drop in Number of Bankruptcy Filings
Bankruptcy filings in 2002 went through the roof -- half of the top 10
largest bankruptcies of all time happened during the past four quarters,
according to the web site BankruptcyData.com, reported the Boston
Business Journal. WorldCom Inc., with total prebankruptcy assets at
nearly $104 billion, ranked No. 1. Conseco Inc., Global Crossing Ltd.,
UAL Corp. and Adelphia Communications also landed in the Top 10 in 2002.
To read the full article, point your browser to
href='http://www.bizjournals.com/boston/stories/2003/02/03/focus3.html'>http://www.bizjournals.com/boston/stories/2003/02/03/focus3.html.
U.S. Bankruptcy Court in Kansas Prepares to Lose Half of its
Judges
Two of the four U.S. Bankruptcy Court judge positions for the state of
Kansas will be vacant soon, something officials say is a rarity for the
Kansas courts, the Wichita Business Journal reported. Judge
James Pusateri and Judge John Flannagan, who've been in their
positions for a combined 40 years, plan to retire this year. Court
officials have already started the search for their replacements, says
Judge Robert Nugent, the bankruptcy court judge for Wichita. But
filling the judge positions, which carry 14-year terms, isn't easy, he
says, reported the Business Journal. Nugent says the hiring
process was started early in hopes that the court won't have both
positions vacant at the same time. To read the full story, point your
browser to
href='http://wichita.bizjournals.com/wichita/stories/2003/02/03/story5.html'>http://wichita.bizjournals.com/wichita/stories/2003/02/03/story5.html.
Big Severance Packages for Top Executives an Exception, Survey
Finds
Despite headlines announcing multimillion dollar severance packages to
departing CEOs, most companies worldwide limit departing executives to
four or fewer weeks of severance pay for each year of service and only a
quarter or fewer of employers are offered perks such as financial
planning, retirement planning, secretarial support or use of office
space, according to the Global Severance Practices Survey conducted by
Right Management Consultants, SmartPros.com reported. 'This is the
'behind the headlines' story,' said Geof Boole, executive vice president
of Right's Career Transition Line of Business. '…55 percent of the
companies we surveyed around the world place a cap on severance
payments, even at the top levels of their organizations,' reported the
news service.
Half of the companies surveyed said they based their severance
practices solely on years of service. The most common offer to exiting
top executives was continuation of medical benefits, outplacement and
continuation of life insurance. In addition, some companies also offered
continued incentive plans, retirement planning, continuation of stock,
use of office space and continuation of disability insurance,
SmartPros.com reported.
US Airways 4th-Quarter Loss Narrows to $794 Million
US Airways Group Inc., which filed for chapter 11 bankruptcy protection
in August,
said its fourth-quarter net loss narrowed because the company reduced
costs and increased sales, Bloomberg News reported. The loss of $794
million, or $11.67 a share, compared with a loss of $1.16 billion, or
$17.07, in the same period of the previous year, the company said in a
statement. Sales increased 3.1 percent to $1.61 billion from $1.57
billion, reported the newswire. The Arlington, Va.-based company still
plans to emerge from bankruptcy at the end of March, Chief Executive
Officer David Siegel said in the statement, Bloomberg reported.
Kmart, Fleming Say They Will End 10-Year Supply Agreement
Fleming Cos., the biggest U.S. grocery distributor, ended a contract
with its
largest customer, Kmart Corp., as the retailer tries to get out of
bankruptcy, Bloomberg News reported. The companies ended the agreement
by rejecting the parties' 2001 contract through Kmart's chapter 11
bankruptcy filing, they said in a statement distributed by PR Newswire.
Kmart and Fleming said a continuation of the contract wasn't in either
of their best interests, reported the newswire.
Unions Question United's Proposal
Leaders of unions at United Airlines offered pre-emptive objections
yesterday to a recovery plan that airline executives are expected to
present to them today, the New York Times reported. The union
officials said that the airline had failed to lay out hard financial
numbers showing how much in concessions was needed from each union to
help move United out of chapter 11 bankruptcy protection. United, a unit
of the UAL Corporation, presented parts of its plan to the unions'
financial advisers on Jan. 24. Last Thursday, United presented a more
detailed version of the plan to the UAL board. Yesterday, Paul
Whiteford, the Air Line Pilots Association representative on the
company's board, said that the plans presented so far lacked
specificity, reported the newspaper.
Integrated Telecom Wins OK Of Plan Disclosure Statement
Integrated Telecom Express Inc. on Monday won approval of its disclosure
statement for a chapter 11 liquidation plan, Dow Jones reported. The
order, signed by Chief Judge Peter J. Walsh of the U.S.
Bankruptcy Court in Wilmington, schedules a hearing to consider
confirmation of the plan on March 24. Under the terms of the proposed
plan, Integrated Telecom will liquidate its remaining assets and
distribute the proceeds of the liquidation to its creditors. The debtor
company expects to be able to fully repay both secured and unsecured
creditors, reported the newswire.
Thanks for visiting Today's Bankruptcy Headlines. New articles
are posted here
each business day.
|
